Mobile payment is gaining traction at a consistent rate. The report “Global Mobile Payment Methods: Second Half 2017” reveals that one-third of worldwide Internet-connected shoppers have recourse to mobile payment methods for various purchases. Chinese nationals have imposed themselves as the driving force of the mobile payment penetration, with over 500 million citizens making payments through mobile devices.
Shoppers have a preference for mobile payment systems
The fact that shoppers are increasingly preferring to use mobile payment methods for their purchases is expanding the mobile payment industry worldwide. The trend is stronger in the Asia-Pacific region largely because of China that has over 500 million people using mobile devices to make payments.
Other countries in the region are also rapidly following the same trend. In Europe, it is the Scandinavian countries that have imposed themselves as the leaders in mobile payment adoption. The scenario differs when it comes to the United States even if consumers are increasingly using mobile wallets: the adoption rate is relatively slow when compared to many other regions in the world.
In Latin America, about 25% of Internet users have embraced mobile payment already while in Africa, the mobile payment market is growing consistently.
Chinese mobile payment services are having an influence worldwide
Chinese travelers, used to cashless payment systems at home, are equally reluctant to carry large amounts of cash when traveling. Cash payments are no longer favored as inputting a password or fingerprint on mobile devices has become much more familiar to them. Using mobile payment is also viewed as being much more secure than using credit cards or having to carry cash.
Because China’s middle class is expanding simultaneously with the country’s economy, the number of Chinese travelers is also increasing as they now seek for bigger experiences. As a result, their spending is also soaring, inevitably creating a significant impact in countries they are visiting, according to a report conducted jointly by Alipay and Nielsen. The respondents were aged between 20 and 50 years.
In addition, the mobile payment platforms they are using are enjoying greater penetration in foreign markets. Very demanding in terms of convenience and facility of payment while traveling, Chinese nationals prefer using their local payment services such as Alipay and WeChat Pay even when they are abroad.
Foreign merchants, especially in those countries largely visited by Chinese tourists, cannot stay unresponsive to the demands of this large category of consumers. Affluent Chinese tourists are known to love shopping abroad: 61% shop at duty-free stores, 47% opt for department stores while 31% prefer luxury boutiques. The report equally highlighted that Chinese travelers love shopping for luxury products in the US and in Europe, spending more than other tourists. Compared to other tourists, Chinese travelers use mobile payment 6 times more for their purchases abroad.
Merchants and retailers cannot overlook the benefits of including Chinese mobile payment platforms as part of their payment options. At the end of 2017, the Chinese giant Alipay inked a contract with payment processor First Data, allowing over 4 million merchants based in the US to cater for the Chinese clients to complete transactions. Comparatively, about 4.5 million US merchants accept Apple Pay. Every year, over 4 million Chinese travelers visit North America and extending their preferred payment services seemed logical. Worldwide, Alipay has approximately 520 million users. The other Chinese lifestyle mobile app is WeChat Pay. In 2016, Chinese consumers spent over $5.5 trillion through both these mobile payment platforms.
Payment security is a key concern for Chinese travelers
Apart from convenience, the other main factor encouraging Chinese travelers to use mobile payment is secured. The report underlined that Chinese tourists are always wary of payment mishaps such as paying twice for a product or service when using bank cards. At the same time, they also have concerns when they do not or cannot receive SMS transaction notifications when using the cards abroad. Another of their main concerns is feeling embarrassed when a card payment fails to be completed. This is why they largely prefer using mobile payments.
Alipay, for instance, offers an intelligent real-time risk monitoring based on user behavior. In case of unauthorized transactions, protection services are also guaranteed to members. WeChat Pay has equally invested massively in developing a robust state-of-the-art fraud control and security system, with real-time monitoring. It has over 650 million active users monthly.
Article published in Mobile payment :
Image : Shutterstock