WeChat Pay: The payment phenomenon in China

The mobile app transforming China from a cash dominant to cashless society. | Source: Flickr Attribution 2.0 Generic (CC BY 2.0)

The mobile app transforming China from a cash dominant to cashless society. | Source: Flickr Attribution 2.0 Generic (CC BY 2.0)

 

You may have never heard of WeChat if you're from anywhere outside of China, but its importance in everyday life as well as business cannot be underestimated. It is currently the biggest mobile app in China right now and one of the biggest in the world with 900 million users worldwide.

It’s difficult to describe WeChat since no app in the Western World alone can do all the things WeChat offers. WeChat started out in 2011 as a basic text messaging app, similar to Whatsapp, but today it does anything you can think of.

You can perform common tasks such as:

-          Chat with friends

-          Send photos and videos

-          Send ‘moments’ (Similar to Facebook Posts)

-          Video / Voice Call

-          Send voice messages

-          Create group chats

More impressive feature that makes it unique:

-          Easily sending money to friends and family (Especially important in Chinese Culture)

-          Paying utility bills E.g. Water, Electricity, Gas

-          Paying for goods and services

-          Renting a bicycle (Another upcoming phenomenon in China)

-          Calling a taxi (Like Uber)

-          Buy tickets for High-Speed Rail or Flight

-          Buy movie tickets

-          Book hotels

-          Adding friends by scanning a personal QR code

Can smart phones do it all?

Can smart phones do it all?

Note: If you ever decide to do business with Chinese firms or Chinese representatives of domestic/foreign firms (Even in the UK), download and set up WeChat. They may likely ask to add you on WeChat and even if they don’t, asking them to add you can be seen as a kind gesture in building a long-term partnership. This is increasingly common across ALL countries.

A reminder that this is all in ONE app, moving on…

WeChat pay was a recent development, first implemented around 2016 and has become widely used mainly across China in 2017 with supermarkets, restaurants, department stores, even high-end luxury brands as well as gas stations and public transport. 

It may seem like an Apple-Pay-esque system, using your phone to pay for things, but in reality, it is much more convenient.

Unlike most Western Payment systems, WeChat brings the added convenience of not needing a credit card reader or NFC system. There are 2 methods:

1.      The vendor uses a scanning device/their phone to scan your personal QR code, which automatically completes the payment

2.      You use your phone to scan the vendors QR code to complete the payment

Simple.

So what are the advantages over other payment systems?

Unlike major Western payment systems, WeChat pay is more flexible and cost-effective. It gets rid of the need for expensive credit/debit card readers, only requiring simple scanners (Which some stores already have) or just a QR code. It also fully allows a fully cashless society as almost every payment in large urban areas of China can be completed by WeChat pay (which leads on to the next point).

The best part of this is that it is not exclusive to rich firms or government facilities.

In China, it is still common for people to buy food & drink from a local (Corner-shop like) shop or a local market. Rarely do people purchase all of their needs from just a supermarket. The easy application and set-up process allows small businesses to utilise this service via the QR code method which simply allows customers to scan the QR designated to the store. No unnecessary or expensive technology or machinery is required for small businesses and firms.

So why do we need to care?

Simply put: Because Chinese citizens do

Will the need for physical money vanish?

Will the need for physical money vanish?

Most countries today profit from the ever-growing middle class in China with increased spending from tourists into the domestic economy. The implementation of this scheme will help reduce barriers to spending between Chinese tourists and domestic firms.

This is already being implemented across Chinese tourist-heavy countries in South East Asia such as Thailand and Malaysia.

The implementation in the UK has already begun London’s Camden Market, where many shopkeepers are using this system to appeal tourists in an effort to boost sales.

Concluding statement

21st Century China has seen many convenient developments in everyday life. WeChat pay is only one of them but is already well-established across China in less than a year. When other countries start to implement this, it can only benefit them in the future.