Cash - What’sthat?

Chi­nese fi­nan­cial tech­nol­ogy com­pa­nies hope to en­able con­sumer pay­ments with­out cash or credit world­wide

ChinAfrica - - Cover Story -

CHINA’S mo­bile pay­ment providers are work­ing to kick­start cash­less so­ci­eties around the world. Rid­ing on the back of the grow­ing num­bers of Chi­nese tourists abroad, com­pa­nies such as Ant Fi­nan­cial Ser­vices Group’s Ali­pay and Ten­cent’s Wechat Pay are de­vel­op­ing new ways for con­sumers to spend their money while trav­el­ing with­out hav­ing to carry cash or credit.

In do­ing so, these en­ter­prises seek to gain a foothold in coun­tries that lack tra­di­tional credit card in­fra­struc­ture, and grab hold of a nascent mar­ket that may fun­da­men­tally change how peo­ple in­ter­act with money.

In China, elec­tronic wal­lets are ubiq­ui­tous, used for trans­ac­tions both small and large. Last year, Chi­nese con­sumers made 35.3 tril­lion yuan ($5.2 tril­lion) worth of pay­ments via mo­bile de­vices - around half the na­tion’s GDP, ac­cord­ing to In­ter­net con­sult­ing firm Analysys.

By link­ing their bank ac­counts to mo­bile pay­ment plat­forms, users can use the e-wal­let ser­vices on their smart­phones to pay rent and util­ity bills, hail taxis, man­age their fi­nances and do more. Due to the in­creas­ing use of these plat­forms, the amount of mo­bile pay­ments in China is now 50 times greater than that in the United States, which amounted to $112 bil­lion in 2016, ac­cord­ing to data from Amer­i­can mar­ket re­search com­pany For­rester Re­search.

The ser­vices pro­vided by these com­pa­nies have spread to small mer­chants and in­di­vid­u­als who might not need to use cash or credit cards at all due to the con­ve­nience and ease of mo­bile pay­ment op­tions and the lim­ited num­ber of point of sale ter­mi­nals in stores.

In Jan­uary, Ant Fi­nan­cial and U.S. money trans­fer com­pany Money­gram an­nounced a merger which would give the for­mer ac­cess to 350,000 phys­i­cal lo­ca­tions and 2.4 bil­lion bank and mo­bile ac­counts un­der Money­gram.

None­the­less, there are nu­mer­ous ob­sta­cles in the way of mass adop­tion of mo­bile pay­ment, in­clud­ing frag­mented re­cep­tion among mer­chants - in part due to the grow­ing va­ri­ety of op­tions avail­able to con­sumers. Bei­jing-based QF Pay seeks to pro­vide a one-stop mo­bile pay­ment so­lu­tion to mer­chants that would en­able them to ac­cept pay­ment from cus­tomers that use a va­ri­ety of mo­bile wal­lets and pay­ment meth­ods.

Pa­trick Ngan, Pres­i­dent and Co-founder of global mo­bile pay­ment tech­nol­ogy so­lu­tions provider QF Pay, told Chi­nafrica that South­east Asian coun­tries all want to at­tract Chi­nese money. “Mer­chants all want Chi­nese tourism money. Those big con­glom­er­ates, those big shop­ping malls, they all want to have a big sign say­ing ‘we wel­come you’ in Chi­nese be­cause they know [the tourists] spend big.”

Chi­nese mo­bile pay­ment firms will also butt heads with con­ven­tional pay­ment lead­ers such as Visa and Master­card.

“If the sec­tor doesn’t have com­pe­ti­tion, then you’d be wor­ried. There is go­ing to be con­sol­i­da­tion along the way, but mo­bile pay­ment is only scratch­ing the sur­face at the mo­ment.”

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.