What AliPay and WeChat Pay Mean to Online and Retail Merchants
Do you have customers from China? Do you get foot traffic in your stores from Chinese tourists?
If you do, you probably know their hassle of trying to use credit cards or pay in cash: Both are rather difficult for Chinese tourists since, 1) carrying a lot of dollars, pounds, and euros is inconvenient for tourists, and 2) Chinese shoppers only use credit cards about 25% of the time compared to other options. (Chinese tourists also don’t like to use credit cards overseas because of the foreign transaction fees.)
Instead, China is moving toward becoming a cashless society by using AliPay and WeChat Pay, affiliates of Alibaba and WeChat respectively, for mobile-only payments. Mobile payments are becoming so popular, there are even stories of merchants refusing to accept cash payments of any kind, requiring people to use their mobile phones instead.
The growth of AliPay and WeChat Pay has reached around the world, with over 800 million users. And Chinese tourists with WeChat Pay are now able to shop at U.S. retailers using an in-app module called Travelex Pay. One website estimates that AliPay’s and WeChat Pay’s daily cross-border transaction amount is between 500 – 600 million Yuan.
Travelex Pay allows customers to use money in their WeChat Pay account to generate a digital gift card for the exact amount, which they use for their purchase. Currently, the app (powered by the digital gifting service, Swych) is accepted at more than 200 retail partners — department stores, big box stores, national restaurants, fashion brands like American Eagle and Banana Republic. This lets Chinese tourists to buy products that cost a lot more back home, or aren’t even available.
And when you consider that 2.9 million Chinese tourists visited the U.S. in 2018, that’s a lot of people who want to spend money in your stores.
It’s also an important number to remember for websites and online merchants that have Chinese nationals who want to access your content, whether it’s adult entertainment, online sports, or even news and information. Online merchants who accept payments from outside the their home country, AliPay and WeChat Pay could be two big sources of revenue in the coming years.
Finally, if you’re in a place popular with Chinese tourists — London, Paris, Oxford, Boston, Chicago, New York, Los Angeles — you want to make it as easy as possible for them to pay, which means you should figure out how to accept AliPay and WeChat Pay. If anything, this could increase the number of visiting Chinese tourists into your store, since they already know they’ll be able to easily buy from you.
Are you ready to start accepting alternative/non-credit card payments and payments from foreign customers? Do you have a merchant services provider who can help you process those payments and deal with the regulations that come with accepting them?