Holiday drives cross-border spending

By Huang Ge Source:Global Times Published: 2018/2/21 21:28:40

Chinese internet payment firms eye global market

A Chinese visitor pays via Alipay at a store in Rovaniemi, Finland on Monday. Photo: VCG

Thanks to an increasing number of Chinese outbound tourists, domestic mobile payment companies have seen a rise in cross-border transactions during this year's Spring Festival holidays.

Experts said that China's mobile payment sector still has great growth potential and will become more popular in overseas markets in the coming years.

About 6.5 million Chinese people are expected to have travelled abroad during Spring Festival, according to the China Tourism Academy. And payment firms are stepping up efforts to improve the consumption experience for Chinese travelers.

Cross-border transactions via China UnionPay, China's largest bankcard payment processor, surged during the seven-day holidays, according to a statement the company sent to the Global Times on Monday, but it did not specify by how much.

Vendors in countries and regions including Nepal, Kenya and Vietnam launched Quick Response (QR) code payments via China UnionPay before the holiday. Also, more than 1 million point of sale (POS) terminals in 18 countries including Singapore, Australia and Russia allowed users to pay with their smartphones using Quick Pass, UnionPay's mobile payment tool.

Tencent-backed instant messaging service WeChat said in a statement sent to the Global Times on Wednesday that Chinese tourists were given an opportunity to receive digital cash in the form of virtual red envelopes via WeChat Pay while they shopped overseas during the holiday.

WeChat Pay allows Chinese tourists to make payments in yuan, while enabling overseas merchants to receive the payment in their local currency.

As an increasing number of Chinese people are eager to travel abroad, domestic mobile payment tools like WeChat Pay and Alibaba-backed Alipay are endeavoring to expand into foreign markets, Li Chao, an analyst at Beijing-based market consultancy iResearch, told the Global Times on Wednesday.

"Actually, the payment platforms aim to help extend domestic consumers' spending habits to global consumer markets," he said.

"During my visit to Osaka in Japan this Spring Festival, I found that Alipay was accepted in most local restaurants, drugstores and shopping malls," said a 20-something resident of Shenzhen, South China's Guangdong Province who only gave his surname as Du.

"I was told that I would be given preferential rates if I used Alipay to make payments in Osaka," Du told the Global Times on Wednesday.

But as Alipay has only just entered the Japanese market, it is not yet that convenient to use the platform there compared with the experience in China, Du said. Consumers can scan a QR code if they want to pay via Alipay or WeChat Pay, but it's easier in China since domestic vendors put the QR codes in easily spotted places in their stores, Du noted.

Growth potential

China's mobile payments totaled 81 trillion yuan ($12.77 trillion) as of October 2017, the world's largest volume, the Xinhua News Agency reported on Tuesday, citing the Ministry of Industry and Information Technology.

The domestic mobile payment sector has evolved quickly across the country because of advanced technology and it is now eyeing global markets such as Southeast Asia, the US and Canada, Li Chengdong, a Beijing-based industry analyst, told the Global Times on Wednesday.

"UnionPay is universally accepted in Da Nang, Vietnam, and some shopping malls also allow users to pay via WeChat Pay," a 20-something white-collar worker in Beijing surnamed Cui told the Global Times on Wednesday. Cui went on a five-day trip to Da Nang during Spring Festival.

By the end of 2017, the State Administration of Foreign Exchange had given approval for about 30 domestic mobile payment firms to offer cross-border payment services to international merchants, according to media reports.

"Mobile payment companies in China are endeavoring to go global as they not only hope to accommodate Chinese users, but also want to attract more foreign consumers," Li Chengdong said.

Alipay had entered 36 foreign countries and regions by the end of 2017 and WeChat Pay has so far reached 25 overseas countries and regions.

But internet payment is not yet used as widely in foreign countries as in China, and most overseas vendors still prefer POS terminals, Li Chao said.

"The reason is that UnionPay is somewhat related to the Chinese government, which makes it easier to reach cooperation in foreign markets,"  he said.

It is harder for other third-party payment firms to get involved in the financial systems in foreign countries, he noted.

Posted in: ECONOMY

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