About China payment systems

Not related to Revolut.
Just wanted to ask, maybe someone knows.

How does China ultimately came to using WeChat and Alipay payment systems (payment with phone) in such large scale?

Was this path choosen by chinese government (by limiting competition and adding artifical restrictions) or this was wrong business tactics by VISA/Mastercard for China market (maybe big fees for merchants for using cards?)

Using cards is extremely unpopular way to pay in China.

Well, it’s probably quite the combination of different things

Accepting card payments through PoS requires a terminal :slight_smile:

Alipay and WeChat? QR based. Can be done through a phone, or anything else under the sun.

Not sure about the fees but Alibaba and Tencent are so ingrained into Chinese daily life that they could make a monopoly out of anything if they integrate it with one of their apps.

People love convenience. This is why Google and Apple Pay are so popular. They’re provided by companies you know are trustworthy and that you know will work reliably if your phone supports it.

In a market like China where low-end phones sell incredibly fast and where Google isn’t allowed to sell things? There’s no ultimate reliability with NFC access on phones (unlike here where it’s literally a given your phone has NFC, although my friends phone doesn’t support it :clap::joy: he has a Chinese phone!)

So QR code is about as convenient as it can get, it works on all your stuff. It works P2P. It’s secure (data is only stored on your device and you read the merchant’s data).

Again, I’m not sure about fees, but just imagine that tomorrow Facebook Messenger introduces FBMP and it pays Tesco, Lidl, Aldi, Asda, Shell, BP and all your other day-to-day merchants a nice down payment to take their payment method

The next day they all have it and the acceptance is good enough that it’s convenient

I’m even surprised Facebook have not done it yet.

They’re trying to do so with their own coin that would maintain value across currencies.

They’re also trying to do P2P payments but stopped this in the UK a little while ago to presumably focus on America :frowning: real shame as now I have to use PayPal to send money to my gril

paypal is so confusing, I can’t really understand what fees (if any) are they taking for person2person money sending. Different pages in their website says different things, so I gave up (found other ways) :expressionless:

2 Likes

This made sense to me:
https://qr.ae/TWnEBT

The post by that person mentions cultural reasons (“I’m using the bank money, not my money”, “old person behavior”) and lack of benefits from Chinese banks to use cards (I guess something along the lines of no loyalty programs).

The apps you mention you already use for instant messaging, so one thing less to take care of (imagine a WhatsApp Pay?) especially for younger people for whom using a mobile device is not a problem.

It also seems that the regulatory environment does not help.

Happy to see a local replying here.