Ant Group, the official payment partner for the Hangzhou Asian Games, announced that Alipay had completed the support for overseas users to use mobile payment services in China.

Athletes and tourists from around the world can now enjoy various convenient services across the country using Alipay, including shopping, hailing a taxi, taking the subway, and visiting tourist attractions.

To use these services, users must download the Alipay app, click “Register Account”, and select the “International Version”. After completing the registration, users can click on “Add Now” to enter the card binding page and follow the prompts to complete the card binding operation.

Alipay now supports international card organizations such as Visa, Mastercard, and Discover Global Network (including Diners Club). Furthermore, the usage of Alipay after binding an international card is no different from using a domestic bank card, supporting both QR code payment and payment code payment.

Similarly, Tencent announced a deepened cooperation with international card organizations such as Visa, Discover Global Network (including Diners Club), JCB, and Mastercard.

This collaboration aims to systematically open up WeChat Pay’s merchant network in various cities in China. Inbound individuals can activate WeChat Pay by using their passport, Hong Kong and Macau Residents Travel Permit (Home Return Permit), Taiwan Residents Travel Permit (Taiwan Compatriot Permit), Hong Kong and Macau Residents Residence Permit, Taiwan Residents Residence Permit, and Foreign Permanent Resident ID.

After binding an international bank card, they can conveniently consume at millions of small and medium-sized merchants.

These developments mark a significant step towards making mobile payments more accessible to foreigners in China, providing them the same convenience that local residents enjoy. It is expected to significantly enhance the experience of foreign visitors in China, especially in the context of the upcoming Hangzhou Asian Games.

In 2022, the total views of the original content on WeChat Channel (video account) increased by 350% year on year, and the scale of live broadcast increased by 300%, according to WeChat’s data released on 10 January 2023.

The commercial potential of live video broadcasting continues to be released, and the corresponding e-commerce sales increased by more than eight times year on year.

In 2022, the number of daily active creators and the average number of videos uploaded by the video account increased by more than 100% year on year, the number of creators with at least 10,000 fans increased by 308%.

The number of video account earners increased by 101%, and the total income of live video anchors increased by 447%.

Live video GMV increased by more than 8 times year on year in 2022, and the average selling price exceeded 200 yuan. Among them, the top three categories of consumption are covered by clothing, food, and beauty.

The monthly active users of WeChat Search have increased to 800 million, and the total search volume increased by 54%. Mini Programs are widely used in scenic spots, hotels, airports, and other fields, and the number of WeChat Mini Programs has increased by 183%.

WeChat Search contributed to 27% of Official Account follower growth and 20% of Mini Program’s new daily active users. Its contribution to WeChat Channel follower growth has increased by 120%.

WeChat MAU

Over 330 million of WeChat’s (known as Weixin in China) 1.2883 billion monthly active users use video calling. 780 million users are on the social networking section WeChat Moments and 120 million publish updates. The content network WeChat Official Account has 360 million users.

WeChat has evolved from an instant messaging app to a service meeting the digital needs of over 1.27 billion MAU in Q4 2021. Each day, more than 120 million active users post in social networking Moments, 360 million users read Official Accounts articles, and 500 million users access Mini Programs (Q1 2022) daily.

For Q4 2021, WeChat daily active advertisers expanded by over 30% year-on-year. Over one-third of Moments’ advertising revenue was generated from advertisements using Mini Programs as landing pages and advertisements connecting users to customer service representatives via WeCom.

WeChat Video Accounts’ time spent per user and total video views more than doubled year-on-year as Tencent enriched content diversity and enhanced the product experience.

WeChat Mini Programs

The daily active users on WeChat Mini Programs reached 450 million according to WeChat official data in January 2022. The transaction volume of catering, tourism, and retail increased by 100% year-on-year. Mini Program DAU reached 500 million (Q1 2022).

The number of Mini Program developers has exceeded 3 million.

In 2020, the daily active users of WeChat Mini Programs exceeded 400 million, according to its official data shared at its annual event WeChat Public Lecture.

The number of mini programs used per user increased by 25%, the average transaction value per user grew by 67%, the number of programs with transactions increased by 68%, and the annual transaction volume of more than doubled in 2020.

In 2020, more than 100 million people purchased in shopping malls and department stores on WeChat Mini Programs. With the help of mini program pre-sale + offline self pick-up mode, more than 300 million users purchased fresh fruits and vegetables.

WeChat Mini Programs overview

WeChat Games

In 2020, the commercial realization of WeChat mini games increased by 20%.

Last year, the proportion of male and female users in the distribution of mini games accounted for 50% respectively. 40% of the users in the first and second-tier cities, and 65% of the users aged 30 and above.

Compared with 2019, the per capita game duration of mini games increased by 50%, and the average number of games played increased by 20% in 2020.

China game live streaming revenues to double by 2021

WeChat Search

The number of monthly active users of WeChat search has reached 700 million according to WeChat official data released in January 2022.

WeChat search staff said that in the mobile Internet era, search should not be limited by the search box, but need to be accessible by the touch. Users can search while chatting.

WeChat search will screen out the high-quality content of WeChat and produce a more accurate connection with users.

In the future, it can expand the search scope to the whole internet-based the needs of users. The search results are currently mostly provided by WeChat Official Account and Sogou.

Top search trends in China

WeChat Pay

In January 2022, WeChat shared the latest progress on WeChat Pay:

• 23 thousand monthly service providers
• Over 10 million merchants
• More than 1800 banks and Payment institutions
• 23 thousand monthly merchants
• In the next three years, WeChat Pay will continue to carry out digital upgrading of WeStore, with a planned investment of more than 10 billion yuan

In 2020, Zhifufen, a credit score on WeChat Pay, saw more than 240 million users. It boosted the conversion rate of e-commerce orders by 14% and the repurchase rate of retail merchants by 73%.

In 2021, WeChat mini stores and Zhuanzhuan (a secondhand-goods marketplace) will integrate Zhifufen.

In the e-commerce industry, WeChat Pay’s Zhifufen enables post-payment after receiving the delivery and faster refund. Users can quickly receive a refund after submitting return logistics information.

As of January 2022, more than 50% of users have activated Zhifufen, whose solutions cover more than 3000 industries. WeChat Pay unit cooperates with the e-commerce industry on “buy first and pay later”, which has been used by more than 100 million users.

Zhifufen also announced the launch of audio and video members’ services such as “watch first and pay later”, which helped solve the problems that bothered audio/music and video users to deduct fees in advance and forget to terminate their contracts.

China’s online payment users penetration reaching 86%

Enterprise version of WeChat: WeCom

In 2020, there were 80,000 enterprise WeChat partners, with a year-on-year growth of 400%. 

Acquire, convert, and retain customers through WeChat Ads + WeChat Work (WeCom)

UnionPay Flash supports the top-up payment of QCoin, QQ Music, and Tencent Videos. WeChat Mini Programs will gradually support Flash Pay, being in beta test since 22 September.

On October 2nd, Alipay announced the progress in promoting interconnection with China UnionPay. it has opened online payment scenes to the UnionPay Flash app, covering the first batch of 85% Taobao merchants.

For offline, it has also implemented QR code scanning and mutual recognition with UnionPay Flash payment in multiple cities and plans to cover all cities in China by March 2022.

UnionPay, also known as China UnionPay or by its abbreviation, CUP or UPI internationally, is a Chinese financial services corporation headquartered in Shanghai, China. It provides bank card services and a major card scheme in mainland China.

Founded on 26 March 2002, China UnionPay is an association for China’s banking card industry, operating under the approval of the People’s Bank of China (PBOC, central bank of China).

It is also an electronic funds transfer at point of sale (EFTPOS) network, and the only interbank network in China that links all the automatic teller machine (ATMs) of all banks throughout the country.

In 2015, UnionPay overtook Visa and Mastercard in a total amount of value of payment transactions made by customers and became the largest card payment processing organization (debit and credit cards combined) in the world after the two.

China’s 3rd-party payment market 2021-2025e: mobile vs. internet

These coupons are for all people in Wuhan. WeChat real-name verified users can enter the corresponding mini program to collect the coupon.

At the same time, there are 1.8 billion yuan (US$254.63 million) worth of business coupons issued by online platforms. The first phase started at 12:00 p.m. on April 19 and will last for six weeks until May 31 2020. And, the second phase will start on 1 June 2020.

One coupon can be collected at a time, with a face value of 10 yuan, 20 yuan, 50 yuan, and 80 yuan. The first phase will have 30 million yuan coupons, redeemable from 20th April onwards.

The Wuhan consumption voucher received by consumers through the WeChat mini program is applicable to the merchants who use WeChat merchant payment settlement. However, merchants who use the personal WeChat payment code, will not accept those vouchers.

According to Hangzhou Municipal Bureau of Commerce, the city’s fifth round of e-consumption coupons was issued at 8pm of 20 April, with a total of 1.5 million digital card packages. Each has a total value of 50 yuan, including 5 general consumption coupons with a value of 10 yuan each and 10 yuan further subsidy for every 40 yuan consumption.

As of 24:00 on April 16, 321 million yuan (US$45.41 mn) of Hangzhou government subsidies had been claimed in the first four rounds of coupon campaigns driving a total consumption of 3.422 billion yuan (US$484.05 bn).

As of 20 April 2020, cities in Guangdong province have issued 1 billion yuan worth of e-coupons.

Update (5 Jun): Since the worst of the Covid-19 outbreak in China, the country has issued over RMB5.6 billion ($788 million) in such incentives.

China GDP declined by 6.8% in Q1 2020

The number of e-commerce transactions on WeChat mini-programs increased by 27 times year-on-year in the first half of 2019, according to an official Tencent report.

The top age groups of retail e-commerce mini-programs on WeChat are 30-39, 20-29, and 40-49.

In the meantime, WeChat Pay expanded aggressively in China’s campuses in the first half of 2019, reaching over 50,000 K12 institutions, 1,000+ universities, and 100 thousand education and training institutions. The number of WeChat Pay transactions in universities exceeded 100 million, up 200% YoY.

See a quick comparison of mini-program platforms: WeChat vs. Alipay vs. Baidu

WeChat is testing a new traffic entrance, using payment pages to drive fans from their offline stores according to eBrun News.

The new function of WeChat Pay is still in the stage of internal testing, which is currently limited to offline face-to-face payment.

Merchants can choose to set a WeChat individual account as a “group customer service” in the backend, and the corresponding QR code will be displayed on the page after the user clicks “Join the merchant welfare group”. Users can join the group by adding customer service as a friend.

Continue to read how TikTok helped a milk tea rise to popularity.

The increase in Tencent’s revenues in Fintech in 2018 was driven by its take-rate on commercial transactions collected from merchants, cash withdrawal fees and credit card repayment charges collected from users, and the service fees from financial institutions for the distribution of FinTech products such as WeiLiDai and the wealth management products on our LiCaiTong platform.

In January 2019, Tencent completed the transition to the centralized clearing and settlement system and moved all custodian cash to the accounts of the People’s Bank of China.

WeChat Pay launched a new user interface enabling easier access to new features including virtual subsidiary cards for parents and children. It enhanced account management tools for merchants, including cash register, book-keeping, and revenue sharing settlement functions.

WeChat users grew further to 1.098 billion as of December 2018.

The total daily payment transaction volume exceeded 1 billion for 2018, driven by rapid growth in commercial payments, which represented more than half of the number of transactions. The commercial payment revenue more than doubled year-on-year in 2018. The payment platform connects with tens of millions of merchants and monthly active merchants increased over 80% year-on-year in the fourth quarter of 2018.

Tencent boosted its payment penetration in the food and retail industries thanks to features such as Mini Programs and Scan-to-Pay solution in 2018.

In Hong Kong, Tencent launched the first-of-its-kind cross-border mobile payment service in October 2018, which enables WeChat Pay Hong Kong users to conduct RMB-denominated transactions funded by Hong Kong dollars.

Tencent’s cross-border mobile payment service now covers approximately 1 million merchants in Mainland China, including taxi-hailing, food ordering, and highspeed railway ticketing services. The transaction volume of WeChat Pay Hong Kong increased more than 10 times year-on-year.

Tencent launched WeChat Pay Malaysia services in August, offering online transactions such as mobile credit top-ups, flight and bus ticket purchases, and offline transactions at retail outlets, such as supermarkets, fashion and beauty stores.

Globally, Tencent is expanding our footprint by supporting China outbound travelers to make cross-border payments in overseas destinations, and it now offers real-time tax refund services for Weixin Pay users in over 80 airports. Weixin Pay is now available in 49 markets outside Mainland China, supporting cross-border payment transactions in 16 currencies.

Building on its payment user base, Tencent offers FinTech services to under-served consumers, conveniently and at low cost. LiCaiTong, the wealth management platform, helped manage over 600 billion yuan of customer assets as of the end of 2018.

WeBank, Tencent associated online banking business, achieved rapid growth in the outstanding loan balance of its micro-loan product for consumers, WeiLiDai. WeBank also expanded its loan services to enterprises, serving the financing needs for small and micro businesses customers through WeiYeDai.

LiCaiTong enlarged its user base, reaching 100 million accumulated users by the end of 2018. Tencent expanded its FinTech services by rolling out LingQianTong, which enables users to invest the unused cash balance in their WeChat Pay accounts in funds.

China’s payment and online banking mobile app market overview

WeChat is going to launch a new feature “Gifts upon payment” for WeChat Pay to get the small and medium merchants further engaged in January 2019. They can exchange those points with increased limits for balance withdrawal or VIP membership of Tencent Video, etc. 

Merchants who hold the WeChat Officially issued QR code could earn points every time someone transfers money to them by scanning such QR code, 1 yuan for 1 point. The accumulated points can be used to exchange profits, such as free service fee for cash withdrawal if they want to withdraw balance from WeChat Wallet to their bank card.

They can check the detailed information in “Receipts Manager” to check what benefits are available with points they have earned at that moment. For example, they can exchange a certain amount of points with Tencent WeSim Card, WeChat Reading coupons, VIP membership of Tencent Video, tools for WeSing, or coupons for JD.com and Vipshop, etc.

In this way, more and more merchants and retailers would be happy to provide and encourage WeChat Pay options for customers. In return, some merchants might find a way to provide better services considering all those profits they are to get with the support of repeated customers.

China mobile payment usage in Q3 2018; Tenpay (Tencent) the highest penetration

Tencent launched a digital bank card on WeChat called WeBank Card via WeBank, China’s first private commercial bank established. One of its major shareholders is Tencent.

Users can now complete the card setup in the comfort of home, without having to make a trip down to the bank to fill an application form. Users will no longer worry about losing the cards and the troublesome process they have to go through to get a replacement card.

Users can just login and register an account via the WeBank app, and create a new account card within 2 minutes. Moreover, this digital bank card is as safe as traditional bank cards, consisting of the basic functions including bank transfer, money deposit, consumption.

Tencent has totally integrated this digital bank card with WeChat, which is commonly used by 963 million monthly active users. The money in users’ WeChat accounts, and even other banks deposits, can be transferred to the WeBank’s account, and enjoy more than 4% annual interest rate.

For example, by depositing 50,000 yuan, the daily income earned is 5.80 yuan. In comparison, other banks only offer the consumer 0.41 yuan for the same amount of deposit, which means the user misses out on 1,967 yuan of interest annually. For the balance currently held in WeChat, the interest is 0%.

After the binding between WeChat account and the Internet bank card, users can directly use the money in the WeBank’s account.

In other words, users do not need to frequently change the WeChat payment method and no longer need to transfer money into WeChat account to transfer to others, users just need to link the WeBank card, and they will be able to easily manage their finances!

That’s right, through his own bank, Pony Ma achieved the most important feature: consumption and financial synchronization while earning money. Money is automatically deducted from the account if need be, and if there is no use for the money, the user can enjoy the benefits from the interests

REPORT: Mobile Payment Usage in China 2017

Chinese consumers spent US$5.5 trillion via mobile payment platforms in 2016, about 50 times more than their American counterparts. By the end of 2016, Tencent alone saw its active mobile payment accounts exceed 600 million users per month.

The average payment transactions also exceed 600 million transactions per day. The cashless lifestyle is now becoming a reality in China.

All online payments to go through a network platform in China by mid 2018 »

WeChat Pay launched open platform for overseas merchants

Also check out: China third-party online payment market overview Q1 2017

WeChat Pay held a WeChat Pay Overseas Open Conference in Tokyo on July 3, 2017, launching an open platform of WeChat Pay for overseas merchants.

WeChat Pay is a payment feature integrated into the WeChat app, users can complete payment quickly with smartphones. WeChat has Quick Pay, QR Code Payments, In-App Web-Based Payments, and Native In-App Payments, all to fulfil the full range of scenarios your customers expect to fulfill different payment situation.

Combined with WeChat official accounts, WeChat Pay service explores and optimizes o2o consumption experience, provides professional internet solutions for physical business. It is the best choice of mobile payments.

Overseas merchants and service providers can apply online for WeChat Pay payment services taking 7 to 15 working days. As WeChat lowers its requirement for its payment service integrations, WeChat Pay sees fast growth in Japan. Its peak transactions in June were 40 times as much as it was in January 2017.

The number of merchants integrating WeChat Pay has increased by over six times in Japan according to WeChat; and, the number of transactions has increased by 16 times in June from this January.

China’s mobile online payment users exceeded 852 million

Chinese outbound tourists can pay by RMB directly skipping the trouble of foreign currency exchange.

When the buyer has completed the payment, the amount will be allocated to a partner settlement bank for currency exchange. After collecting payment from the buyers’ account instantly, WeChat Pay will buy foreign currency in T+1 day according to the spot rate that the settlement bank provides. When vendors’ turnover accumulates to 5000 USD (lower limit), we will transfer payments to the receiving bank account of vendors immediately.

In addition to payment services, WeChat offers overseas merchants other products including membership, vouchers, advertising on Moments and WeChat Official Accounts. It also offers marketing and technical supports.

WeChat Pay support major currencies including but not limited to GBP, HKD, USD, JPY, CAD, AUD, EUR, NZD, KRW settlement. WeChat Pay will have settlement with vendors according to the price in local currency. For unsupported currencies, trade can be made through settlement on US dollar.

Quick case study: SPD Bank’s credit card WeChat mini-program

The rapid growth of social networks and e-commerce platforms has transformed the way people communicate and transact around the world. Integrating digital payments into these growing networks and platforms has presented vast opportunities to drive economic opportunity, financial inclusion, transparency, security, and growth.

In practically all countries individuals, businesses, and policymakers are recognizing these opportunities and acting on them, but perhaps nowhere more so than in China.

This report examines two of China’s most far-reaching applications – WeChat and Alipay – and explores their role in the development of one of the world’s largest and most sophisticated digital payments ecosystems.

China’s online payment market share

As China’s economy is unique, this report has also identified key factors in the successful integration of digital payments into social networks and payment platforms. In this way, the report aims to provide lessons that can be assessed, and where relevant, applied in other markets beyond China.

As social networks and e-commerce continue to grow and offer new opportunities as well as risks, the report adds to a body of knowledge about how digital payments can improve lives and strengthen economies in all parts of the world.

Combined Alipay and WeChat payments (by value) have risen from less than RMB 1 trillion (US$81 billion) in 2012 to an estimated RMB 20 trillion (US$2.9 trillion) in 2016 – a 20-fold increase in four years.

In 2015, non-cash payments accounted for nearly 60% of retail transactions in China. Of all non-cash payments, Alipay and WeChat Pay captured 28% of all retail transaction fees; effectively what would have
been nearly US$20 billion in payments fees on transactions had they been processed on traditional card payment networks. Digital payments as a whole have grown rapidly from about 3.5% of all retail transactions in China in 2010 to about 17% in 2015.

Digital payments as a whole have grown rapidly from about 3.5% of all retail transactions in China in 2010 to about 17% in 2015.

Key Findings

Significantly, the growth of digital payments using existing platforms and networks in China has brought with it a much wider range of digital financial services that are both expanding financial inclusion and economic opportunity for individuals and creating valuable new business models for companies.

1. New financial services have proven highly popular, delivering benefits to large numbers of people.

Alibaba worked with Tianhong Asset Management and launched the Yu’E Bao (meaning “leftover treasure”) product, a low-risk money market account similar to a bank savings account. Customers can take the money “left behind” on their digital wallets and invest it on the Yu’E Bao product.

While these services usually involve small individual amounts, they nonetheless provide benefits that can be helpful particularly for people living on low incomes. The scale of these individual savings products, when viewed in aggregate, is significant helping to explain how these products represent new business models that are attracting attention in countries around the world.

Yu’E Bao has grown from having 0.2 billion RMB (US$29 million) in assets under management (AUM) in 2013 to more than 810 billion RMB (US$117 billion), serving more than 152 million customers three years later and making it one of the largest money market funds in the world.

2. Digital finance has dramatically increased economic activity and e-commerce among merchants and consumers

As of September 2016, one provider, Ant Financial, had lent a total of RMB 740 billion (US$107.3 billion) to over 4.11 million small and micro enterprises and entrepreneurs. New business models enabling lending to people on low incomes are driving significant new usage of digital payments in a country where 79% of adults have had a bank account at some point, but only 10% of these have ever borrowed in the formal financial system.

For example, Huabei or “Just Spend,” is a service launched in 2014 which allows shoppers to take out small month-to-month loans. On Single’s Day 2016 (a major consumer-focused holiday similar to Valentine’s Day), consumers spent a total of RMB 26.8 billion (US$3.9 billion) using the Huabei service on two major e-commerce platforms.

3. Effective incentives and demonstrable utility are key factors in stimulating initial use and cultivating customer loyalty

For example, in 2014, Tencent launched its WeChat Red Envelope campaign – a digital version of an old Chinese custom of giving small amounts of money to friends and family in red envelopes during Chinese New Year.

In order to receive the red envelopes, the recipient was required to have a WeChat account that was connected to a bank account. Within the first week, more than 8 million people used the service, and the number of new bank accounts connected to WeChat surged by the millions.

During Chinese New Year 2017, WeChat users sent each other 46 billion digital red envelopes, an increase of 43% from 2016.

4. New credit scoring services are becoming available which are increasing access to credit, particularly for people on low incomes and small businesses.

One such service – Sesame Credit – is able to assess credit worthiness for over 350 million real-name registered users and 37 million small businesses that buy and sell on Alibaba Group marketplaces. When users sign up for Sesame Credit they agree to allow Ant Financial to use their transaction data to determine their credit score.

These credit-scoring services are increasingly being used outside of China in both the public and private sector. For example, a trial program was set up in June 2015 with the Luxembourg Government to allow credit scores to be used in place of bank records in securing a visa for the Schengen travel area in Europe.

5. The major digital payments providers are rapidly expanding beyond China and investing in new financial technology companies.

Users can now use Alipay and WeChat Pay in Thailand, one of the most popular destinations for Chinese tourists, to pay for goods and services in many stores.

Alibaba has made a significant investment in India’s PayTM and Tencent into India’s PayU, two of the largest digital payment providers in India. Tencent has also recently launched a joint-venture initiative in Africa, allowing for payment in South African Rand.

These and other experiences in China show there are clearly vast opportunities that other countries can harness by using existing e-commerce platforms and social networks as a foundation for expanding the digital payments ecosystem.

A 2016 report from the McKinsey Global Institute estimated that digital finance could add US$3.7 trillion to GDP across all emerging economies in aggregate by 2025, a 6% boost above the projected baseline, and create 95 million new jobs.

For China, it could mean an additional US$1.05 trillion (RMB 7.25 trillion), a 4.2% GDP boost above the projected baseline GDP for 2025. In China, that shift to digital – which is now well underway – would not have been possible without existing platforms and infrastructure.

Recommendations

For payment providers, e-commerce firms, and social networks

Attracting users by building on existing e-commerce platforms and social networks, using strategic incentives to deepen usage. For example, Tencent was able to build a widespread digital payment product within an existing service, which helped it gain rapid acceptance.

Major payment platforms in China have developed a variety of additional incentives for users, such as vendor promotions and discounts, and creative gamification concepts around popular cultural events.

Making platform tools openly available to innovators for seamless integration. For example, making software development tools, such as application program interfaces (APIs), available can enable third-party vendors and Small and Medium Enterprises (SMEs) to make their own innovative additions to the ecosystem in response to user needs and preferences, thereby organically growing the ecosystem.

Enabling universal access for users and businesses by developing ecosystems that function across various platforms. China’s two most popular payment apps are “hardware-agnostic,” in that both work across the Android and Apple iOS platforms, which combined, account for 99.3% of smartphone operating systems in urban areas.

This has helped to drive uptake and build out a large inclusive digital payments ecosystem. For payment providers, embracing interoperable platforms adds clear value for users and can help to grow a wider network of merchants and acceptance points.

For governments

Developing a supportive regulatory environment that strikes a careful balance between encouraging innovation and managing risk. In its efforts to strike a balance between these two objectives, China has announced policies to foster domestic development and competition, and support innovation.

The G20 High-Level principles also recognize the need to support innovation while managing risk and encouraging the development of digital financial products and services.

In China, the government has taken a “wait and see” approach to regulation which allows for innovation by industry participants within informal limits, under careful supervision by the relevant regulators. As products mature and their implications for users and the ecosystem emerge, the regulators develop the appropriate guidelines and rules to address these implications, protect consumers, and support a more cohesive payments ecosystem.

This approach of protecting and fostering domestic players may not be appropriate for every country, and each country should consider their own circumstances, but China does offer an illustrative example of how this strategy can work.

Setting public investment priorities that encourage digitization. This is particularly the case with the vital preconditions of digitization, such as effective infrastructure for the internet and mobile telecommunications.

In 2016, China had 530 million 4G users. This exceeds the number of 4G users in the United States and Europe combined. China expects to spend RMB 1.2 trillion (US$1.88 billion) over the next three years to further improve the quality of its broadband connectivity and mobile access. This will support the use of mobile smartphones – an important element in digital payments and digital finance usage.

For both businesses and governments

Encouraging public-private partnerships (PPPs) to develop an ID verification system or similar method to identify payers and payees accurately. Having a widely adopted and secure means of identifying customers is vital to enable secure and transparent payments and improve consumer protection.

It is also important in order to advance Know Your Customer (KYC), Anti-Money Laundering (AML), and Combating the Financing of Terrorism (CFT) efforts, and meet international standards in these areas. Governments and payment providers can work together to enhance adoption and use of identification.

Incorporating lessons of successful business models in payments over messaging platforms to drive adoption of digital payments in their own markets. As more examples emerge of companies successfully expanding their payments businesses internationally, there is a growing knowledge base that can reduce the trial-and-error component of building out inclusive digital payment ecosystems, particularly by anticipating key risks that have emerged in other countries and observing commercial and regulatory approaches that have proven effective.

China’s tech giants (particularly Tencent and Ant Financial) are rapidly expanding internationally, PayPal continues to grow its global footprint, and companies like Facebook are pushing into international payments, heralding a period of rapid international expansion of payment platforms. As these companies expand, national or regional players can both observe and incorporate their experiences, or partner with them to drive their own transitions to digital payments.

A key overarching issue in payments (both traditional and digital) is trust and convenience. There must be trust in the community or network (i.e., between the payor and payee), trust in the security of the payment mechanism, trust in the regulatory environment for consumer protection and recourse, and a belief that the method is beneficial. An examination of the China experience demonstrates that robust digital payments ecosystems can address all of these concerns and are, therefore, a useful way to accelerate the acceptance and use of digital payments. Despite the benefits, there are challenges.

An examination of the China experience demonstrates that robust digital payments ecosystems can address all of these concerns and are, therefore, a useful way to accelerate the acceptance and use of digital payments. Despite the benefits, there are challenges.

Regulators are still figuring out the right balance between innovation and regulation. China’s financial institutions are still working out their fintech strategies. Alipay and Tencent are expanding faster than many other similarly sized global tech companies. And we are still very much in the early days of fintech both inside and outside China. How this all plays out remains to be seen, but the initial impact of digital finance on China is difficult to over-exaggerate.

There are significant benefits of convenience and utility to be achieved by integrating payments functionality in existing e-commerce platforms and social networks. But even greater benefits of financial inclusion can be reached when robust digital payment ecosystems are developed around those networks and platforms. As China’s experiences

How this all plays out remains to be seen, but the initial impact of digital finance on China is difficult to over-exaggerate. There are significant benefits of convenience and utility to be achieved by integrating payments functionality in existing e-commerce platforms and social networks. But even greater benefits of financial inclusion can be reached when robust digital payment ecosystems are developed around those networks and platforms. As China’s experiences

But even greater benefits of financial inclusion can be reached when robust digital payment ecosystems are developed around those networks and platforms. As China’s experiences illustrate, being able to access vital financial services in an easy and convenient way increases the likelihood of their use. Digital payments ecosystems, therefore, can be a powerful catalyst to accelerate digitization and increase financial inclusion.

This report was originally published on BetterThanCash.org.

Tencent and Starbucks announced strategic cooperation in Guangzhou today; and from today on, WeChat Pay is available in about 2,500 Starbucks stores in China.

Starbucks customers simply need to have a payment QR code under WeChat Wallet and scanned to make the payment, which takes roughly about a few seconds.

Starbucks will also launch social gifts on WeChat in early 2017, becoming the first retail brand experiencing this WeChat feature.

The number of WeChat monthly active users reached 846 million in Q3 2016. The cooperation will help further promote WeChat Payment adoptions, which at the same time drives branding and engagement on WeChat for Starbucks.

Many retailers in China have adopted Alipay, WeChat Pay, or both. KFC integrated Alipay in July 2015 while McDonald’s started accepting both Alipay and WeChat payment in September 2015. Starbucks might want to build its own membership payment ecosystem; but, it could be a good decision to collaborate with WeChat facing the unique culture and policies issues in China.

The National Day holiday in China is the last holiday of the year and the longest one with 7 days starting on 1 October. China Railway is about to receive 110 million person trips during this year’s National Day holiday, an increase of 11.3% compared with 2015.

This short video, shot today (National Day) at Great Wall of China, illustrates how crowded it could be during holidays in China pic.twitter.com/4hY8Sqf84q

— China Internet Watch (@ChinaInternet) October 3, 2016

It’s peak season for the tourism industry. People travel, domestic or abroad. Among outbound travelers, the most popular destinations remain Thailand, South Korea, and Japan.

The number of person trips totaled 2.236 billion in the first half of 2016 with an increase of 10.5% YoY according to China’s National Tourism Administration. Safety, sightseeing, dining, visa, and currency are top factors when Chinese outbound travelers choose the destination.

Read more: https://www.chinainternetwatch.com/18860/chinese-intl-traveler-2016/#ixzz4Ld1Uhtw8

Alipay launched Global Future Airports Program this week, aiming to provide not only payment solutions but also convenient services for travelers. From this Saturday, the National Day, the cooperating airports will be opened to Alipay users including:

• Munich Airport
• Tokyo Narita International Airport
• Singapore Changi International Airport
• Osaka Kansai International Airport
• Seoul Incheon International Airport
• Auckland International Airport
• Bangkok International Airport
• Hong Kong International Airport
• Taoyuan International Airport
• Macau International Airport

Alipay has been making efforts for overseas markets in recent years; and, as of August 2016, Alipay is available at over 80,000 retail stores outside China.

WeChat Payment is offering cash rebate (in the form of Hongbao, red envelope) if outbound travelers use WeChat Payment in cooperating oversea retail stores.

With the growing number of the middle class, China’s outbound travel spend will be near twice the amount of the U.S. ($134 billion), reaching $255.4 billion by 2025 according to a joint survey by Visa and Oxford Economics.

Continue reading: China outbound tourism market overview 2016

The number of offline retail stores integrated with WeChat Payment has exceeded 300,000 according to data released in during a WeChat Payment partner conference.

Over 200 million users have linked their bank ATM cards with WeChat, which allows auto-deduction from the corresponding bank account while they make payment using WeChat. In addition, WeChat fund transfer users are 2.5 times more than WeChat Hongbao users.

30% customers of McDonald’s made payment using WeChat, the top payment option along with cash payment (30%) and followed by Alipay (21%).

Non-bank payment institutions in China processed a total number of 25.895 billion transactions or 16.51 trillion yuan in 2015, an increase of 101.47% and 102.83% respectively according to People’s Bank of China. Wherein the mobile payment reached 5.633 billion transactions totaling 23.46 trillion yuan.

Alipay and WeChat Pay are the two most popular mobile payment products in the market in China. UnionPay is making a threat with mobile QuickPass and partnerships with ApplePay and SamsungPay.

Read more: China E-payment Reached $86.17 Trillion in Q3 2015