Mobile payment in China is especially popular in recent years. It is undoubtedly more timely and efficient. The way Chinese consumers pay for things has evolved dynamically and very differently from the experience of Western countries. In 2012, 96% of payments were still made in cash. However, in 2018, 85.2% of payments are made via mobile payment modes, which shows how quickly the Chinese market has evolved. Given the prevalence of mobile payments in China, foreign investors would do well to develop a strategy to incorporate them into their businesses.
Advantages of Mobile Payments for Businesses
More than three quarters of Chinese consumers pay via their mobile phones, making it necessary for foreign businesses to adapt to this trend. In the west, these is no such an app yet that can connect payments with social media. These platforms provide businesses with an opportunity to bridge the gap between attracting new consumers and engaging with existing consumers more efficiently.
And there is a lot of potential for foreign investors to take advantage of different mobile payments systems for Chinese consumers, and to maximize their profits through loyalty schemes and gifting schemes.
Major Service Providers of Mobile Payment in China
One of the main reasons why mobile payments are popular in China is that they are promoted by the strongest digital players in China. Alipay belongs to Alibaba Group and is the main payment method on Tmall and Taobao, the two biggest e-commerce platforms in China. Meanwhile, WeChat Pay, a part of Tencent, also proves its popularity thanks to the almost 1 billion users of WeChat in China. It is available through the app WeChat (or Weixin in Chinese), which is the most popular social media app in China with more than one billion users.
How do Mobile Payments Work?
Quick Response (QR) codes dominate the Chinese mobile payment market used mainly by Alipay and Ten Pay. There are two different ways the QR payment can work, depending on the who the vendor is.
One way is for the buyer to scan the vendor’s QR code, which is usually printed and somewhere visible on the till. The payment app will recognize the vendor and the buyer enters the payable amount and completes the payment. This is a popular method if the vendor is a small local shop or taxi driver, as they won’t have the resources to invest in a QR reader.
The second way is for the vendor to scan the buyer’s QR code displayed on their smartphone. This QR code is generated through the payment app and when the vendor’s QR reader recognizes it, they will enter the payable amount that is then deducted from your mobile wallet. This method is used by bigger companies that have invested in a QR scanner.
As each coin has two sides, the mobile payment, while bringing positive effects to the economy, also come with their own unique risks. Business adopt strategies to use them effectively.
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If you have further inquires, please do not hesitate to contact Tannet at anytime, anywhere by simply visiting Tannet’s website english.tannet-group.com, or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143422, or emailing to tannet-solution@hotmail.com. You are also welcome to visit our office situated in 16/F, Taiyangdao Bldg 2020, Dongmen Rd South, Luohu, Shenzhen, China.
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