Paying like the Chinese
Rachel Clayton looks at whether Kiwis should consider popular Chinese payment systems.
Kiwi retailers are missing out on an opportunity to attract Chinese shoppers, an analyst says. Mobile payment services WeChat Pay and Alipay have become so popular in China, some retailers don’t accept cash or credit cards.
WeChat’s parent company Tencent launched its social media site and payment service in New Zealand in 2016, but retailers have been slow to adopt the new technology.
Earlier this month, Wellington mayor Justin Lester and an Alibaba representative told RNZ there was also interest in bringing Alipay to the capital.
Alibaba managing director for Australia and New Zealand Maggie Zhou said she wanted to provide the mobile payment service to Chinese people travelling in New Zealand.
Payments expert Lu Zurawski of specialists ACI Worldwide made a recent visit to Beijing and was stunned by how hard it was to use a credit card there.
In China, consumers use mobile payments frequently to pay for hospital bills, buy food at street stalls, and at fresh produce markets. It also allows retailers to send out promotions.
Most restaurants also have QR codes stickers on tables so customers can order food off the menu and pay for it on their phones, Zurawski said.
‘‘I have long ridiculed QR codes as a viable customer experience. I still think I’m right, but frankly I have to admit that 600 million or more users of Alipay and WeChat Pay cannot all be wrong.
‘‘Consumers and retailers are probably going to need to embrace a new demand for paying this way.’’
Pay Plus managing director Simon Rouse was also in China last year, and was shocked at how popular mobile payments were. Pay Plus is a WeChat Pay accredited provider in New Zealand.
‘‘You cannot live in China without WeChat. You use it for taxis, restaurants, public transport. You don’t see eftpos terminals, they don’t exist, some shops say no cash and just accept WeChat or Alipay,’’ he said.
Both WeChat Pay and Alipay use an app linked to a user’s bank account. At the point of sale, shoppers scan a QR code, put in their code and the money comes out of their account.
In New Zealand, WeChat Pay settles with an Tencent accredited provider, and the retailer receives the payment the next day.
Haka Tours started using a WeChat social media account three months ago, and has already seen an increase in sales.
Haka Tourism Group boss Ryan Sander said: ‘‘It’s mind boggling how much functionality [WeChat] has’’.
‘‘We have partnered with two Chinese travel bloggers and their social media posts direct enquiries to our WeChat account and that has worked super well.
‘‘We have had lots of enquires and a number of sales. The next steps for us is location based marketing through WeChat which means we can target WeChat users based on their location and demographic data with paid content.’’
Last month, Tencent became the first Chinese firm to be worth more than US$500 billion (NZ$730 billion) and surpassed Facebook to
''Frankly I have to admit that 600 million or more users of Alipay and WeChat Pay cannot all be wrong.'' Lu Zurawski
be the world’s fifth-most valuable company.
‘‘The prevalence of these payment systems domestically in China means some new tourists don’t even bother with international credit cards,’’ Zurawski said.
WeChat spokeswoman Anne Casey said language and digital barriers by the Chinese government meant the majority of Chinese did not follow mainstream or social media.
Zurawski said it wasn’t expensive to set up and in China, WeChat Pay exploded when single traders like market stall holders accepted payments directly into their WeChat wallets.
‘‘As long as turnover was modest, the fees for this is zero,’’ Zurawski said.
In New Zealand, retailers can pay a one off payment of $149 to accept WeChat payments.
Total spend on WeChat Pay and Alipay was estimated at around
US$3 trillion in 2016, he said.
‘‘With annual transaction volumes probably nudging US$150b, these payment schemes may already be the biggest in the world today.’’
First Retail managing director Chris Wilkinson agreed retailers should embrace Alipay and WeChat.
‘‘Consumers from mainland China present significant potential for New Zealand businesses and we’re already seeing the impact this is having, not only in our main cities and tourism destinations, but also tourist routes such as in Southland and Otago, Waikato, The Bay of Plenty and Marlborough.’’