What delegates to NAJ’s recent Active America China Summit in Atlanta heard from Daniel Crain, managing director of global ready education for the BRIC Marketing Group is that a case can be made for tying into any or the component(s) of the “Trifecta” of payment systems: China’s UnionPay bankcard/credit card; Alipay; and WeChat Pay.
Each of the three have user numbers in the hundreds of millions and each has a suite of services to which a travel supplier can tie into. What might tilt one toward WeChat vs. the other two is the penetration of the WeChat into so much of its Chinese user based through the range of activities, such as messaging, that are a part of a user’s every day life.
We’ve assembled some of the key elements of Crain’s presentation and augmented it with information we gathered on our own to illustrate what the Trifecta is all about.
The Trifecta …
China Union Pay:Founded in 2002, the Shanghai-based company’s bank card has grown exponentially in its number of users: In an article last summer on finextra.com, it was reported that, according to RBR’s Global Payment Cards Data and Forecasts to 2022 study, the continued rapid expansion of the Chinese cards market has helped UnionPay to increase its share of cards to 43 percent in 2016, and extend its lead over Visa and Mastercard. UnionPay has been the largest scheme globally for card numbers since 2010 and, by the end of 2016, there were more than six billion UnionPay-branded cards in circulation. RBR also found that UnionPay, Visa and Mastercard collectively account for 80 percent of cards worldwide.
AliPay: It was founded in established in 2004 in Hangzhou, China in February 2004 by the Alibaba Group and its founder, Jack Ma—China’s richest person. Alipay moved its headquarters to Shanghai, although its parent company, Ant Financial, remains Hangzhou-based. As far as we could determine, Alipay, which overtook PayPal as the world’s largest mobile payment platform in 2013 had about 450 million users at the end of 2016.
WeChat Pay is a digital wallet service for users of WeChat, which was founded in 2011. It is owned by Tencent, China’s largest technology company. WeChat has grown exponentially and at latest count the number of WeChat users was near a billion. The number who use WeChat Pay was around 340 million at the end of 2016.
Usage—Crain expands upon the ways in which the three payment systems can be used:
—In terms of various uses, WeChat Pay closely follows AliPay. It can be used to pay bills, buy goods online and offline, order tickets, grocery deliveries, hail a cab and do just about everything else. In addition, WeChat Pay powers the rapidly growing WeChat ecosystem. In addition, WeChat Pay powers the rapidly growing WeChat ecommerce ecosystem, making buying and selling products with WeChat online stores a smooth and secure experience.
—Moreover, WeChat continues to expand its services to various financial products—from investment funds to insurance, allowing users paying for that wth WeChat Pay and from within the app.
—In offline settings, WeChat Pay works pretty much in the same way as AliPay—using a system-generate dynamic QR code. In fact, both systems have become so popular that it’s a common site to see WeChatPay and AliPay QR codes next to each other at points of sale.
—Although Union Pay issues credit cards, it is better known as China’s primary debit card provider. It is always linked to a user’s bank account and requires using the physical car to process a transaction. Up until the introduction of the QR payment systems and a mobile app, this was the only way to go to process a payment.
—UnionPay is still the most commonly accepted payment in China with nearly every business being the network’s member. Most government services also accept Union Pay.
—Unfortunately, the reliance on magnetic strip and the security PIN makes Union Pay a less secure payment method.
For a destinations or travel suppliers who want to know more before committing to a partnership with UnionPay, AliPay or WeChat Pay, they should consult with one of the firms that specialize in the Chinese market before determining the level of commitment they want to make before venturing into this area of partnering and promoting.
