"Hard control" foreigners! Why has China's mobile payment been so dominant?

10/09 2024 495

New evolution in payment convenience.

Article | Huashang Taolue by Xiong Jianhui

Payment is the fundamental support that drives commerce and daily life forward.

It is akin to language, influencing commerce and daily life in the extent and scope to which it enables greater convenience and efficiency.

Nowadays, China's mobile payment, having already achieved the world's highest coverage rate, is poised to lead the charge in terms of convenience as well.

["Hard Control" of Foreigners: China's Mobile Payment]

The fiery National Day holiday once again shattered people's perceptions of the Golden Week.

On National Day alone, 120,000 people flocked to Tiananmen Square to witness the flag-raising ceremony; tickets for numerous popular domestic tourist attractions sold out, with order volumes surging by 37% year-on-year, and bookings for homestays jumping 55% year-on-year.

Railway passenger traffic soared past 21.448 million, setting a new record for daily passenger departures; civil aviation passenger traffic also reached 2.384 million, up 11.6% year-on-year.

Not only has the volume soared, but the quality has improved as well.

Alipay platform data further reveals that during the first four days of the National Day holiday, both domestic and foreign tourists were active:

Among inbound tourists, Alipay spending increased by approximately 120% year-on-year, with spending by tourists from the dozen or so countries that China has granted visa-free entry to since 2023 growing nearly threefold year-on-year.

Foreign tourists continue to bring new business to Chinese merchants, with the number of merchants using Alipay to cater to foreign customers growing 100% year-on-year.

Spending by Chinese and foreign consumers using Alipay's newly launched "Tap and Pay" feature increased by 130% month-on-month compared to September.

On National Day, Beijing Capital Airport, Tianjin Binhai International Airport, Hohhot Baita International Airport, Nanchang Changbei International Airport, and Harbin Taiping International Airport emerged as hotspots for "Tap and Pay," with spending growing 110% from the first day of service.

What is "Tap and Pay"?

In essence, it is a new payment method introduced by Alipay. Users simply need to unlock their phone, "tap" it on the payment terminal, and with a crisp "ding" sound, the payment is completed in a single step without needing to switch screens.

During the National Day holiday, many popular tourist cities across China became hotspots for experiencing "Tap and Pay".

In Changsha, for instance, in addition to 21 commercial streets and complexes such as the IFS Mall and Hisense Plaza, chain stores like Juewei Duck Neck, Snack Boom, Dai Yonghong, Xinjiayi, and 7-Eleven have all integrated "Tap and Pay," giving this "Entertainment Capital" an added boost.

Domestic tourists find it novel, while foreign tourists are even more delighted.

In Chengdu's Taikoo Li, China's first "International Digital Consumption Demonstration Block," "Tap and Pay" has become the new norm for foreign tourists engaging in Citywalk excursions.

Whether at international brand stores like Gentle Monster or tea shops like Wang De Chuan and Amao Shouzuo, foreign tourists simply need to "tap" their phones to pay, triggering custom English voice prompts like "Welcome to Chengdu!" and "Chengdu, home to pandas, and much more!".

From foreign tourists and YouTube bloggers to diplomatic ambassadors, all have expressed curiosity and delight at "Tap and Pay".

Recently, Sasheko Nasev, the Macedonian Ambassador to China, couldn't help but linger in Chengdu's Kuanzhai Alley, where he experienced the convenience of "Tap and Pay" for purchasing local specialties. He highly praised China's innovative payment method, stating:

"In China, you can pay anytime, anywhere as long as you have a mobile phone. Whether it's paying the bill at a restaurant, booking movie tickets, taking the subway, or ordering takeout, you can do it all with Alipay. It's truly impressive."

▲Macedonian Ambassador to China Sasheko Nasev experiencing "Tap and Pay" in Chengdu

For Jacek Wojtowicz, a Polish young man, the differences between Central Europe and China are striking.

In Poland, most people use bank cards, while older individuals prefer cash.

However, in China, "whether you're taking the subway or ordering takeout, you can do it all with Alipay, which isn't as convenient in Europe. And Alipay doesn't just 'scan and pay'; it also allows 'tap and pay.' It's amazing!"

From delicious cuisine, beautiful scenery, and friendly people to a convenient digital lifestyle, all these factors have made him increasingly fond of China.

Today, China's mobile payment user coverage rate stands at an impressive 86%, firmly ranking first globally.

Among them, the cool experience of "Tap and Pay" has garnered a wave of positive sentiment among young people. Data shows that nearly 70% of "Tap and Pay" users are young people.

So, why is Alipay pushing hard for "Tap and Pay" at this moment?",["New Experiences, New Commerce, New Technology"],"To many young people, mobile payment is something that has always been there, almost as if it were a natural part of their lives.

According to the "2023 Survey Report on the Usage of Mobile Payment by Individual Users" released by the Payment & Clearing Association of China, "convenience" is one of the primary reasons users choose mobile payment. In particular, the penetration rate of QR code or barcode payment is as high as 92.7%.

Even so, there are still many payment pain points in reality that can leave people feeling helpless.

Pain Point 1: You're waiting in line to pay when suddenly your boss calls. At this point, you face a dilemma: either answer the call and abandon the payment or interrupt the call to complete the payment – either choice is inconvenient.

Pain Point 2: You're waiting in line to pay while casually playing a game on your phone. When it's your turn, the game is in full swing, forcing you to reluctantly exit.

Pain Point 3: For some elderly individuals and foreign friends, navigating through apps to find the payment code is still not a smooth process.

So, can we design a new payment method that doesn't require searching, asking, or interrupting? One that relies on basic instincts and intuition – simply unlocking your phone and "tapping" to make a secure, efficient, and speedy payment?

Alipay's "Tap and Pay" was born out of this need.

In the past, with "Scan and Pay," you had to open the app, navigate to the payment page, and scan the QR code to complete the payment.

Now, with "Tap and Pay," you simply unlock your phone and tap – three steps reduced to one, with payment completed in just three seconds.

For those less experienced with technology, like elderly individuals or foreigners, the payment process is drastically shortened from one minute to just ten seconds.

Clearly, this perfectly addresses consumer pain points.

However, the disruptive nature of "Tap and Pay" goes beyond simply pleasing consumers.

In fact, "Tap and Pay" is not just a tool for quick payments; it also helps merchants streamline the previously impossible trio of payment, membership enrollment, and marketing in a single step.

This is the primary reason merchants value "Tap and Pay".

Take Juewei Duck Neck as an example.

As the country's first brand to integrate "Tap and Pay" with IP marketing, Juewei Duck Neck has enabled the feature in 302 of its stores in Changsha.

During payment, customers simply need to "tap" their phones, and a cute, mischievous "Little Fire Duck" appears on the screen, rotating and interacting with customers in a delightful manner.

For customers, every "Tap and Pay" transaction comes with discounts and earns points.

For Juewei Duck Neck, the waiting time is transformed into an engaging interaction. Problems like difficulty in recruiting members, filling out member information, and increasing member activity are all addressed with the "tap and engage" feature.

In just half a month, with the help of "Tap and Pay," Juewei Duck Neck's new member acquisition efficiency increased by 3.5 times, and member payment sales grew by 4.7 times!

The new approach extends far beyond just member management.

"Tap and Pay" also enables diverse scenarios such as ordering food, validating tickets, saving favorites, playing games, renting power banks, and opening lockers.

Take vending machines as an example.

Traditional "Scan and Pay" requires six steps. However, after Youbao vending machines were upgraded with "Tap and Pay," the process was streamlined to just two steps, resulting in a natural selection rate exceeding 90%.

Youbao couldn't help but marvel that with "Tap and Pay," the entire vending machine industry deserves a revamp.

Currently, Alipay has collaborated with partners to create over 50 "Tap and Pay + X" industry solutions.

Looking ahead to the future of the Internet of Things, "Tap and Pay" demonstrates unlimited potential.

At present, "Tap and Pay" is primarily used for mobile phones and payments; in the future, people will have increasing numbers of wearable and sensing devices.

With a "tap" on your VR headset, you can download a blockbuster movie; with a "tap" on your electric toothbrush, you can input a brushing model; with a "tap" on your electric vehicle, you can pay tolls without slowing down…

This has rapidly established "Tap and Pay" as a new entry point for new business modalities and scenarios.

Major smartphone manufacturers are also leveraging this trend to enhance consumer experiences and create new selling points for their products.

Companies like Huawei, Xiaomi, OPPO, and Vivo have responded by upgrading their systems to fully support "Tap and Pay".

Huawei even predicts that "Tap and Pay" will be the next generation of mobile interaction.",["China's New Payment: A Global 'New Language']

From a global perspective, the development prospects for "Tap and Pay" are even broader.

In reality, mobile payment methods vary significantly between China and other countries.

In China, mobile payment is based on barcodes or QR codes, and people are accustomed to "scanning to pay".

In contrast, NFC payment is the mainstream in other countries.

"Tap and Pay" cleverly combines the simplicity of NFC payment with the underlying technology of barcode payment, utilizing existing POS networks to enable a more technologically advanced and cool payment method.

At the same time, the Chinese government has also seized the opportunity to support innovation.

In March 2024, the General Office of the State Council issued the "Opinions on Further Optimizing Payment Services and Enhancing Payment Convenience"; based on this, the People's Bank of China established a solution that prioritizes large-value card transactions, small-value QR code payments, and cash as a backup, and explicitly supports "domestic binding of foreign cards" and "internal use of outsourced services".

With policy support, Alipay has accelerated its efforts in "domestic binding of foreign cards".

Currently, overseas users can bind international bank cards such as Visa, Mastercard, JCB, Discover®, Diners Club International®, and UnionPay International to Alipay.

In addition, Alipay provides 16 language versions and translation support, offering foreign tourists online digital services such as online translation, taxi booking, hotel reservations, ticket bookings, public transportation, and currency exchange rate inquiries.

In terms of "internal use of outsourced services," Ant Group's Alipay+ integrates wallets from 13 countries and regions.

This means that Chinese travelers to Singapore, the Philippines, Malaysia, and other popular tourist destinations, as well as visitors from these 13 countries and regions to China or each other, can freely use their local versions of "Alipay".

Collectively, these measures have significantly streamlined mobile payment for foreign friends visiting China, enabling them to navigate the country seamlessly with just their phones, much like their domestic counterparts.

Concurrently, it will undoubtedly greatly improve the convenience of commerce and daily life for domestic compatriots overseas, enabling them to travel the world with just their phones, building upon their experience of traveling China with ease.

▲"Use Alipay When Traveling Abroad" has become the top choice for Chinese tourists

This groundbreaking innovation stems from the soil of China's mobile payment industry and once again showcases Alipay's continued leadership and innovation as a pioneer in this field.

In 2004, Alipay was founded, pioneering online escrow transactions. With the promise of "If you dare to pay, we dare to compensate," countless Chinese began embracing online payments, fueling the booming e-commerce industry.

In 2011, China launched the world's first barcode payment product, which was later upgraded to QR code payment, igniting a tidal wave of mobile payment innovation in China.

In 2024, Alipay introduced "Tap and Pay," enabling "one-step payment." Building upon barcode payment but surpassing it in experience, "Tap and Pay" significantly speeds up the payment process.

As Ambassador Sasheko Nasev of Macedonia aptly put it, China's mobile payment, represented by Alipay, is becoming a digital "Marco Polo," inspiring new insights into payment methods in many countries around the world.

Indeed, payment is the fundamental support that drives commerce and daily life forward.

Just as language does, it influences commerce and daily life to the extent and scope in which it enables greater convenience and efficiency.

Oftentimes, the simplest solutions are the most powerful and international.

From its essence to its form, "Tap and Pay" is a globally accessible, convenient, and efficient innovation in China's mobile payment industry. It serves as a new global language for commerce and daily life in the era of globalization, creating new opportunities for connections between China and the world.

—END—

Welcome to follow [Huashang Taolue] to meet influential figures and read tales of strategy and wisdom.

All rights reserved. Unauthorized reproduction is prohibited.

Some images are sourced from the internet.

If infringement is suspected, please contact us for removal.

Solemnly declare: the copyright of this article belongs to the original author. The reprinted article is only for the purpose of spreading more information. If the author's information is marked incorrectly, please contact us immediately to modify or delete it. Thank you.