For the first time non-Chinese shoppers will be able to use China’s mobile payment platform WeChat Pay and will now, also for the first time be able to link their credit cards to the service.
Tencent-owned WeChat Pay, one of China’s major mobile payment services, will now be available to expats living in China and residents living in Taiwan, Hong Kong and Macao – areas where the mobile wallet is determined to expand its user base. In addition, WeChat Pay users can now link or activate their accounts with credit cards issued by Visa, Mastercard and Japanese network JCB.
As China increasingly becomes a cashless society, Tencent says that this is the first time users are able to use WeChat Pay without having a Chinese bank account or credit card.
Mobile payment platforms like Alibaba’s Alipay and WeChat Pay are increasingly becoming embedded in China’s everyday life and daily consumption needs like online shopping, buying tickets, paying for services, food delivery, bicycle rentals and hotel bookings to name a few.
Released in 2013, WeChat Pay has now expanded to 25 countries globally, servicing the large number of Chinese tourists that travel abroad. “WeChat is initially a social app,” Grace Yin, director of WeChat Pay cross-border Operation at Tencent told Technode recently. “If (local users) don’t have experience using WeChat, then we cannot ask them to establish WeChat payment,” she said.
Australia is a popular destination for Chinese tourists and students and it was one of the first offshore markets WeChat Pay targeted. In 2016, Chinese tourists spent A$9.2 billion in Australia, and WeChat Pay expects this figure to grow to A$13 billion by 2020.
This marks the first opportunity for non-Chinese residents to use WeChat Pay and to link their credit cards to it, which could have two impacts, according to Business Insider :
Grow WeChat Pay’s volume significantly
Although a major mobile wallet player in China, WeChat Pay still trails behind China’s other dominant mobile payment app, Alipay. The new offering, however, could add a major boost to WeChat Pay’s volume of payment users, who until now were only able to use the app for its other services, but can now load their payment information onto it. This could help it drastically grow its market share and gain on Alipay’s dominance.
Improve its relationship between card networks and digital wallets
Historically, card issuers have been frustrated by mobile wallets like WeChat Pay as most of the payments came directly from users’ bank accounts, limiting their access to what is increasingly taking market share from China’s payment ecosystem. With users now being able to link and activate their WeChat Pay accounts to their credit cards, this may improve relations between mobile wallets and credit card issuers.
Over 64% of foreign expats in China used WeChat Pay for their daily needs in 2016, according to a data report released by Tencent in 2017, marking a significant change in consumer behaviour where users no longer need to leave their house with their wallets on them. All they need is their mobile device.