-
Advertorial
-
FOCUS
-
Guide
-
Lifestyle
-
Tech and Vogue
-
TechandScience
-
CHTF Special
-
Nanshan
-
Futian Today
-
Hit Bravo
-
Special Report
-
Junior Journalist Program
-
World Economy
-
Opinion
-
Diversions
-
Hotels
-
Movies
-
People
-
Person of the week
-
Weekend
-
Photo Highlights
-
Currency Focus
-
Kaleidoscope
-
Tech and Science
-
News Picks
-
Yes Teens
-
Budding Writers
-
Fun
-
Campus
-
Glamour
-
News
-
Digital Paper
-
Food drink
-
Majors_Forum
-
Speak Shenzhen
-
Shopping
-
Business_Markets
-
Restaurants
-
Travel
-
Investment
-
Hotels
-
Yearend Review
-
World
-
Sports
-
Entertainment
-
QINGDAO TODAY
-
In depth
-
Leisure Highlights
-
Markets
-
Business
-
Culture
-
China
-
Shenzhen
-
Important news
在线翻译:
szdaily -> Opinion -> 
Digital wallets outshine
    2017-03-13  08:53    Shenzhen Daily

    Winton Dong

    dht620@sina.com

    AS more Chinese embrace e-commerce and third-party payment services in recent years, digital wallets have grown into a lifestyle in China.

    At present, Alipay and WeChat Pay are two of the most widely used third-party mobile payment tools in China. Alipay, which is run by Ant Financial Services — a subsidiary of Hangzhou-based Alibaba Group Holding Ltd., has 450 million real-name users. WeChat Pay is operated by the country’s leading social networking tool WeChat — a branch of Shenzhen-based Tencent Holdings Ltd. — which boasts 846 million active users worldwide.

    Despite the fact that WeChat has more users, it is still second to Alipay in terms of digital payment functions and transaction volume. Alipay is an inborn online payment tool. It was created in 2004 to facilitate transactions on Alibaba’s Taobao platform. According to Worldpay’s 2016 Global Payments Report, Alipay is now the largest digital payment instrument in the world, accounting for 44 percent of the global mobile wallet spending last year and is on the way to reach 60 percent by 2020.

    While urban residents rely heavily on their smartphones and mobile carrier coverage to get access to the Internet, digital payment has gained more and more popularity in Chinese cities. Not only big stores in downtown areas such as Walmart, McDonald’s and Starbucks, but also private peddlers in small alleys have begun to accept digital wallets as an alternative. Such payments are further beefed up in China by the integration of digital payment with public service platforms such as paying utility bills, settling traffic ticket fines, making medical appointments and handling other daily necessities.

    Moreover, both Alibaba and Tencent are good at promoting their brands. For example, Alibaba has its Singles Day or Double-11 shopping spree, which is held on Nov. 11 every year and is similar to Black Friday or Cyber Monday in Western countries. As an important arm of Tencent, WeChat also has its wonderful ability to send and receive “red envelopes” (lucky money). On Feb. 14 this year, WeChat temporarily raised the maximum amount for each red envelope from 200 yuan to 520 yuan (The pronunciation of 520 is similar to the Chinese characters “我爱你”, or “I love you” in English). It was reported that more than 8 million Chinese people transferred 520 yuan to their beloved ones through WeChat on Valentine’s Day. I myself heard several female colleagues jokingly complaining that they got the same amount of money from their husbands on the day.

    Besides big cities, the countryside is also a market with great potential for digital payments. To better support the development of agriculture and promote rural modernization, Ant Financial has declared recently that the company will offer payment, credit, insurance and other online financial services in 1,000 counties in China over the next three years. China now has about 2,200 counties, which means that Ant Financial intends to cover almost half of the country’s total area in the near future.

    Like other multinational companies, ambitious Chinese firms know no boundaries and are quickening their expansion abroad. In 2015, Alibaba spent US$500 million on a 25 percent stake in Paytm, an Alipay-like payment system in India. At the end of 2016, Alibaba’s Global Leadership Academy chose 32 candidates worldwide for one year of training before becoming the company’s global ambassadors. Ant Financial recently got another foothold in overseas expansion after it invested US$200 million in Kakao Pay, a South Korean Internet service provider, which is connected to the 34,000 stores now using Alipay in South Korea. Alipay even gained acceptance at more than 100 restaurants, shops and hotels in the distant northern Finnish city of Rovaniemi at the end of last year.

    As for WeChat, it has already been well received in the Asia-Pacific Region, especially in Hong Hong, Malaysia, India and Indonesia. Prior to Ant Financial, Tencent also invested 403 million yuan (US$58 million) in Kakao Pay in 2012, for a 13.84 percent stake in the Internet company. In 2013, Tencent opened its U.S. office for WeChat and invested US$200 million in promotions, including a TV commercial starring soccer star Lionel Messi. In 2014, the company further joined hands with Google, aiming to invite more users from North America.

    

    According to latest statistics released by iResearch Consultancy, the total volume of third-party online payments in the United States was US$112 billion in 2016, while the figure in China reached US$5,500 billion last year, almost 50 times of that in the United States. In my point of view, there are three factors that contribute to the sharp contrast between the world’s two largest economies.

    Firstly, China has been taking pains during the past years to develop big data, cloud computing, artificial intelligence, intelligent hardware and multilingual studies. These cutting-edge technologies and foreign-language skills extensively boost our e-commerce industry and online payment both at home and abroad.

    Secondly, compared with Westerners, Chinese people, especially the young, are more willing to make purchases with borrowed money. Supported by a credit-rating service from Alipay’s parent company Ant Financial, about 2.3 billion transactions on Alipay in China were made last year with loan service Ant Check Later and more than 40 percent of Ant Check Later users were born in the 1990s.

    Finally, as we all know, credit cards such as Diners Club and American Express are deeply rooted in Western cultures. Unlike those Westerners who have strong feeling and deep love towards such a payment that is based on cardholder’s promise, Chinese people don’t have the same attachment to it, making the leap from cash payment to digital wallets direct and easy.

    (The author is the editor-in-chief of the Shenzhen Daily and guest professor of Shenzhen University with a Ph.D. from the Journalism and Communication School of Wuhan University.)

深圳报业集团版权所有, 未经授权禁止复制; Copyright 2010, All Rights Reserved.
Shenzhen Daily E-mail:szdaily@szszd.com.cn