Firms look to cash-in with e-wallets

Updated: 2016-10-07 07:45

By Cecily Liu and Zhao Siyuan(China Daily Europe)

  Comments() Print Mail Large Medium  Small

WeChat and Alipay plan European expansion, but UnionPay's success could prove a challenge

When 19-year-old Chen Yixin came to the United Kingdom for a four-week holiday in August, she was surprised by the limited availability of online and mobile payment options she could use while shopping.

Apart from Bicester Village, a retail outlet near Oxford, and a few expensive shops such as Harrods, she could hardly use her China UnionPay card, meaning she had to use her Visa credit card, which has less-favorable exchange rates, or cash.

 Firms look to cash-in with e-wallets

Consumers wait for tax reimbursement at the service center of a shopping mall in Paris. European cities such as London and Paris are hot destinations for Chinese tourists but they find the options for payment are limited. Provided to China Daily

Those payment options are different from her shopping habits in China, where she hardly ever carries a wallet, instead making most purchases using WeChat or Alipay, two of China's biggest payment apps, similar to Applepay.

WeChat, developed by internet giant Tencent, and Alibaba Group's Alipay, are frequently used in China for their convenience and reputation for efficient and safe payment. UnionPay is a alliance of Chinese banks, much like Visa or Mastercard, that allows customers to use their cards to pay for goods and services at partner retailers and hotels abroad.

"I was surprised that payment options in the UK are so limited, and I think my holiday experience would improve if I could use WeChat and Alipay," Chen says.

The inconvenience Chen experienced was shared by many of the 12.5 million Chinese tourists who visited Europe last year, and Alipay sees this as an opportunity to expand. Last month, Alipay signed a deal with InterContinental Hotels Group that means its service will be available in IHG's more than 5,000 properties worldwide in a few years. Also this year, the Chinese company forged an alliance with German banking software company Wirecard to offer mobile payment services to Chinese tourists in Germany.

Alipay, which is run by Alibaba's financial affiliate, Ant Financial Services Group, has expanded rapidly in the Chinese mainland, where the company says it has 450 million active users, representing an estimated 80 percent of the nation's mobile payments market.

"With IHG's extensive global footprint, this strategic collaboration will help Alipay reach out to more customers, especially Chinese customers as they travel around the world," says Sabrina Peng, vice-president of Ant Financial.

"As China's leading online and mobile payment solution provider, Alipay aims to deliver convenient and flexible services to customers. We would like to provide 'a taste of home' for our users when they travel abroad."

Firms look to cash-in with e-wallets

Alipay also works with French payment processing firm Ingenico to allow European internet retailers to accept payments through Alipay's e-wallet. In addition, it will allow the Chinese company to accept payments from European customers with MasterCard, Visa and other cards who buy goods through various online marketplaces it runs, such as AliExpress.

Jeongwen Chiang, a professor of marketing at China Europe International Business School in Shanghai, says Alipay's European expansion will benefit everybody involved, providing consumers with convenience and will act as a platform to gather data about consumer shopping habits, which in turn will aid retailers to develop more attractive products for Chinese customers.

Chiang says the biggest challenge for Alipay was to find reliable local partners in Europe, and to become familiar with different rules and regulations regarding payment collection.

Yet despite landmark deals in Europe, the convenience has yet to be felt by consumers such as Chen. "I was not told where I can use Alipay to make a purchase," she says.

An additional problem is the difficulty for Alipay to service older Chinese customers who are not accustomed to mobile payment, who encounter payment challenges because the signature systems of Chinese credit cards are often incompatible with the European chip and pin systems.

A Chinese tourist surnamed Zhang in his 60s from Heilongjiang province, who was visiting the UK last month, says his credit card could not be used in Morrisons, a major British supermarket.

"The cashier didn't know how to work the signature system and called the manager. The payment failed the first time and worked the second time. The process was long, and I was worried because of the failed initial payment," says Zhang, who did not want to give his first name.

He says he hopes there can be a compatible system, but he is not interested in using WeChat or Alipay as he does not use mobile payment in China.

Zhang's reluctance represents the challenge that novel online payment tools face.

Cui Zhijian, an associate professor of operations management at IE Business School in Spain, says it is difficult for such companies to market their payment platforms to Europeans, not least because of the success of UnionPay in Europe.

"Most Chinese outbound tourists will just use UnionPay to purchase products when they go abroad, therefore Alipay's European expansion is in direct competition with UnionPay," Cui says.

Contact the writers at

(China Daily European Weekly 10/07/2016 page7)