China's mobile-payment giants Alipay and WeChat recently announced that they would start allowing tourists to use their electronic wallets when in China. This marked another step to promote the cashless functioning of the second-biggest economy in the world. They are operated by Alibaba Group Holding Ltd. and currently China's most used payment method.
On its official Twitter account, Alipay announced its plans "to open itself up to tourists." The announcement means that now, visitors to the country can pay by simply downloading @Alipay via the app store, whether they are using an iOS or Android-run mobile device. This privilege allows them to travel to and explore China cashless and wallet-free enjoyably. More so, Alipay's announcement was followed by a similar declaration from its rival payment channel, WeChat, just a few hours later.
How Alipay and WeChat Payment Methods Work
Before the two companies announced the excellent news to tourists in China, foreigners would be required to hold a Chinese bank account to push through with a transaction using WeChat Pay or Alipay, which together enable over 90% of all electronic transactions in China. To use the new service of Alipay, once a traveler has downloaded the app, he must enter his Chinese visa and credit card information. Then, he must buy credits which the Bank of Shanghai (stored in his account) provides. Once in China, a user scans a quick response (QR) code with his phone in hotels, stores, restaurants, taxis, or any establishments in the country where goods are sold, including vendors of street food.
As for WeChat, Visa recently announced that it is closely working with Tencent (WeChat owner) for a more direct payment method via this equally popular mobile app, avoiding the need to buy credits. Neither Tencent nor Visa divulged the timeframe for rolling out the new payment service. Both WeChat Pay and Alipay have already linked up with foreign sellers to allow Chinese traveling overseas to use their platforms in other countries such as the U.S., Europe, and some Asian countries.
The Real Beneficiaries of the Payment Services
Both mobile apps may have considered foreign tourists to China as the primary beneficiaries of their new payment services. Kapronasia founder and research director Zennon Kapron said the overseas companies are the real ones to take advantage of what WeChat and Alipay currently offer. He told Bloomberg during an interview that, even though some revenues are expected to come from the foreign tourists using the card, "the more interesting aspect is how seamless the cross-border WeChat Pay and Alipay experience is becoming."
Independently, the Chinese administration is busy developing its own electronic currency. Nevertheless, Beijing has consequently denied speculations that it would roll out later this month and announce that WeChat Pay and Alipay are part of that digital-currency effort.
