U.S. travel suppliers trying to accommodate the Chinese travel market who thought that they had addressed the challenge of handling payments from Chinese visitors by signing up and accepting the UnionPay bank card now have another challenge.
A just released Nielsen survey shows that the use of mobile pay among Chinese travelers has increased rapidly in the past two years and that, last year, more Chinese tourists used mobile pay more than they did cash while traveling abroad.
The finding is based on a survey whose results were issued by Nielsen and Alipay. The latter is part of the Alibaba-affiliate, Ant Financial. The report on the results come from a survey that covered 1,244 merchants and 2,806 Chinese residents surveyed in the fall of 2018.
Dominant among the mobile pay players are Alipay and WeChat Pay, which is tied to the messaging app of the same name and is part of Tencent.
Why the dominance of mobile? The relative strength of Alipay and WeChat pay was succinctly put in an article by Ian Fraser last Sept. 25 in the publication Raconteur. He wrote, “In many ways Alipay, which has around 700 million active monthly customers in China, and WeChat Pay, with over one billion, point to the future of payments for the rest of the world. By contrast, Apple Pay has only 127 million worldwide, even though it is installed into every iPhone.”
Added Fraser, “One thing that has driven their recent growth has been the inadequacy of China’s traditional banks. Bank customers have to contend with long queues in city branches, long journeys to branches in the countryside and horrendous bureaucracy to get a credit card. The low penetration of card payment point of sale terminals in China, partly down to the fact Visa and Mastercard are banned in the country, has been another factor, as has Chinese millennials’ open-mindedness to technological change and willingness to entrust large portions of their lives to companies such Alibaba and Tencent.”