Mobile payment conquers China
11.01.2017 | Innovation
In China, pulling out your smartphone to pay for a purchase has become second nature. Indeed, mobile payments have emerged as a leading payment method in the country, surpassing even credit and debit cards.
Mobile phones: used all day long, by everyone in China!In China, smartphones are a constant companion. They are used to communicate, get information, play games, watch videos, maintain professional or social relationships, go shopping and more. Smartphones play a bigger role in China than in any other country:
- Among the 688 million web users in China, 90% use mobile phones,
- 127 million users surf the web exclusively from their smartphones,
- WeChat, a mobile messaging app, claims some 650 million users in the country.
To meet the needs of its users, WeChat has added a host of new features. In addition to communicating with friends and playing games, the app enables users to order meals, request taxis, pay for purchases in stores—or pay for taxis—and even transfer money to other users. It goes to show how mobile payments have become the new standard for Chinese users.
Mobile payments: online, on a daily basis
Mobile payments quickly conquered China in just a few years. In 2015, 65% of online transactions were made on a mobile phone, according to an Alipay study published in January 2016. Credit and debit cards have suffered from the success of e-commerce: one in five consumers owns one of these cards, but few use cards to pay for online purchases. On the contrary, mobile phones have become the perfect partner for e-commerce, m-commerce and, soon enough, everyday life in China. Paying by scanning a QR Code from a smartphone, both in stores and at automated distributors, is now an everyday habit.
Various players are now battling it out to win over the enthusiasts of mobile payments. Alipay, the uncontested leader in the field, now has 450 million active users (compared with 200 million for Tenpay, WeChat’s integrated payment solution) and carries out 170 million transactions a day.
Users are eager to test out new services on the market: when ApplePay hit China in February 2016, 30 million people signed up in the first few days alone. That enthusiasm has prompted other mobile phone makers to develop their own payment solutions: Samsung Pay, LG Pay and Huawei Pay, for example.
Alipay, leader in mobile payment
Varying contexts across AsiaSo, what is the result? Today, the following payment methods lead China in the order shown below:
- Alipay, which holds a 48% market share—including an ever growing share of the booming mobile market,
- UnionPay, a Chinese banking network and the world’s biggest credit and debit card system by number of cards issued,
- Tenpay, the mobile payment solution integrated into WeChat.
The context in China is unique across Asia. In Hong Kong, credit cards continue to claim the lion’s share of the market, with Visa, MasterCard and PayPal leading the pack! Visa and MasterCard are also on top in Japan, followed by Konbini, a solution enabling consumers to make purchases online and pay for them at convenience stores. In South Korea, Taiwan, Thailand and India, Visa and MasterCard remain the leaders.
With BNP Paribas, Alipay users in China can use the service to pay for their purchases in French stores and it will be progressively extended to the rest of Europe
Alipay, a mobile payment solution offered in China by Ant Financial Services Group, enables its 450 million users to pay for purchases made online and at partner stores. Having become a veritable institution in China, the Alipay “e-wallet” is now poised to conquer the international market: it plans to invade the United States and Europe!
Now, in order to stay in step with its app-holders visiting Europe, Alipay will cooperate among others with BNP Paribas, the European leader in Cash Management, so as to enable the 16 million Chinese tourists who travel outside Asia every year to pay for their purchases with their Alipay mobile app at all partnering stores. Initially available in France, this service will be progressively extended to the rest of Europe.
Accepting the payment method preferred by Chinese tourists represents a major development opportunity for French retailers. Statistics from World Travel and Tourism Council reveal that Chinese tourists spent an impressive 215 billion dollars outside their home country throughout 2015.
By partnering with Alipay, BNP Paribas is clearly demonstrating the Group’s determination both to provide every assistance to retailers looking to expand their sales and to be the bank for all innovative players.