Mobile payments are fast becoming the preferred payment method for Chinese tourists abroad, according to a global research study by payment specialists, Cancan. The study revealed that majority of surveyed consumers intends to use mobile payment instead of cash or cards when traveling overseas this year.
Mobile payments are expected to increase
According to the study, Chinese consumers expect to spend more using mobile wallets like Wechat Pay and AliPay throughout 2017 and 2018 than in previous years. The spending trends of Chinese travelers range from 393 dollars to 786 dollars and from 1,179 dollars to 1,572 dollars, when spending on retail products during an overseas trip. Only 5.7 percent of Chinese travelers spent more than 6,000 dollars on a trip abroad.
Mobile payments are the number one option
When asked about their primary means of payment on holidays and trips abroad, 67 percent said they preferred to use mobile payments, and mobile payment accounts for around 41 percent of all transactions abroad. For half of those surveyed, around 30-40 percent of their transactions abroad were using QR code payment methods, while 34 percent of all surveyed said they pay for more than half of their Chinese retail purchases with their mobile wallets.
Convenience is the main reason for the increase
The reason for the increase in mobile wallet spending is mainly due to the convenience and ease of payment that comes with mobile wallets. Tracking their spending real-time was a big concern for the majority of the respondents, and the mobile wallet gives them the ability to do so easily. In China today, it is normal for consumers to go for days without opening their wallets when spending, and they expect the ability to do the same when abroad. However, some of the reasons given against mobile wallets were lack of merchant availability and ignorance of the ability to pay even when the merchant offers it.
AliPay is the most popular wallet
Of all the wallets available, AliPay, Wechat Pay, and Apple Pay are the three most popular, with AliPay at the top of the list. More than 75 percent of merchants in China now accept this payment method, with reports of it accounting for up to 25 percent of merchant turnover. This has been mainly driven by customer demand, although many retailers appreciate how fast the transactions are, and attribute the increase in volume of sales to faster payment transaction using mobile wallets.
Loyalty rewards are better than before
Originally, the loyalty rewards associated with credit cards were the main reason for their preferred use overseas. However, with an increase in loyalty features being used by merchants worldwide, the trends are changing and customer engagement has increased. The ability to offer customer loyalty and other features is greater with mobile wallets and mobile payments than with any other medium due to the ability of merchants to send details direct to the wallet owner’s mobile device.
Profit can come from mobile payments
Worldwide, merchants can definitely profit from the storm of the mobile payment revolution that is extending from Asia, and the focus should be on the Chinese consumers, according to the managing director of Cancan, Candice Koo. “If the overseas market continues to mirror China’s mobile payment growth and development, this will likely change over time. Loyalty and points programs in mainland China were slow to take off but are now informing an increasing number of merchant’s digital strategy, many of whom all have domestic WeChat official platforms,” she reported.
The implications are clear; mobile payments are now a way of life in China.
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