In recent years, China’s three major third-party payment giants: WeChat, Alipay, and China UnionPay have also gone overseas and have rapidly expanded overseas markets. At present, Alipay can be used in more than 54 countries and regions around the world, and WeChat Pay can be used in 49 countries around the world. It is used in 16 countries and regions and supports 16 currencies. China UnionPay has covered 170 countries and regions around the world, firmly occupying the top spot in the market. In this article, let’s have a look at chinese payment system in overview and find out the best way to develop Chinese market.
With the rapid development of electronic payments in China, it has become a habit of people to go out without a wallet and only with a mobile phone. Even when going out to buy food, you can directly scan the code with your mobile phone, which provides great convenience to people’s lives. At present, institutions such as WeChat Pay (Tencent Financial) and Alipay rely on QR code payments to seize the offline market and occupy a larger share in the third-party payment market. In the second quarter of 2020, Alipay, Tencent Finance and China UnionPay ranked the top three with 49.16%, 33.74% and 6.93% market shares respectively.
Alipay (China) Network Technology Co., Ltd. is a leading independent third-party payment platform in China, founded by Alibaba Group. Alipay is committed to providing “simple, safe and fast” online payment solutions for China’s e-commerce.
Since its establishment in 2004, Alipay has always regarded “trust” as the core of its products and services. It not only ensures the safety of users’ online payment from the product, but also allows users to establish mutual trust between the networks through Alipay, which is a very meaningful step towards establishing a pure Internet environment.
Alipay’s concept of building trust, simplifying the complex, and driving the credit system through technological innovation has won the hearts of the people. Up to now, the Alipay users have covered the entire C2C, B2C, and B2B fields. At present, in addition to Taobao and Alibaba, there are more than 300,000 merchants supporting the use of Alipay transaction services; covering industries such as air tickets, digital communications, business services, and virtual games. While enjoying Alipay services, these merchants also have a very potential consumer market.
WeChat Pay is a payment function integrated in the WeChat client, and users can complete a fast payment process through a mobile phone. As the third-partey payment platform under Tencent Group, WeChat Pay dedicated to providing users and enterprises with safe, convenient and professional online payment services.
With the core concept of “WeChat payment, not just payment”, a variety of convenient services and application scenarios have been created for individual users. WeChat Pay provides professional collection capabilities, operational capabilities, fund settlement solutions, and security guarantees for all types of enterprises and small and micro merchants. Users can use WeChat Pay to shop, eat, travel, seek medical treatment, pay utility bills, etc. Companies, products, stores, and users have been connected through WeChat, making smart life a reality.
WeChat now has more than 1.1 billion monthly active users worldwide with access to 49 countries and regions, supports direct transactions in 16 currencies and 25 settlement currencies, covers more than 300 cities around the world, and serves millions of offline stores. The daily active users of the program exceed 400 million, and the average daily transaction volume exceeds 1 billion.
Over 25 million merchants in the Chinese Mainland support UnionPay QR Code payments. Both UnionPay App and overseas digital wallets adopting UnionPay specifications (e.g., BOC Pay from Hong Kong, BC from South Korea and NETS from Singapore) are widely supported. UnionPay cardholders can enjoy safe and convenient payment services at a wide range of merchant locations for multiple use cases such as public transit, hotels and schools by paying with UnionPay cards, mobile QuickPass and e-wallets supporting UnionPay QR Code.
Based on the four-party model of card organization, China UnionPay provides card issuers and acquirers with transfer and clearing service support for personal online banking payment services and public online banking payment services. Online banking payment business means that when a user initiates a payment at a merchant, he jumps from the merchant payment interface to the card issuer’s online banking and the card issuer verifies the customer information before completing the bank account payment. To meet the market needs of acquiring institutions to access the UnionPay network to carry out online banking payment services.
UnionPay online banking payment business includes UnionPay personal online banking payment business and UnionPay corporate online banking payment business. UnionPay personal online banking payment business means that when a personal bank account owner initiates a payment at the merchant terminal, he jumps from the merchant payment interface to the card issuer’s online banking. The card issuer verifies the customer’s identity and account information and confirms the customer’s willingness to pay before completing the bank account. The UnionPay corporate online banking payment business refers to the business customer owners who use the card issuer Corporate Bank to verify the corporate customer’s identity and account information and confirm the customer’s willingness to pay before completing the corporate account payment business. Institutions can choose to carry out relevant online banking services according to their own business needs.
Based on the complexity and particularity of the Chinese market environment, understanding the ecosystem of the Chinese payment system is a prerequisite for formulating a successful sales strategy in this market. As an officially certified service provider of China’s third-party payment platforms, Oceanpayment has extensive experience in global digital payment solutions and services. For global merchants who want to develop the Chinese market, we support and provide mainstream payment methods in the Chinese market such as WeChat Pay, Alipay, and China UnionPay, in addition to providing technical support and risk control capabilities for merchants worldwide.