SERIES: Chinese Social Media 101
In 2013, WeChat Pay hit China like a big red envelope. A ‘Wallet’ section popped up on WeChat Menu pages, enabling seamless integration between the social media app and users’ bank accounts. Suddenly, WeChat could be used in the place of credit cards, meaning users could chat, post, scan and pay all in one place.
In just a couple of years WeChat Pay has become a national phenomenon. Clever marketing initiatives such as enabling red envelopes to be sent between users at Chinese New Year have doubled its customer base in the past twelve months, and it now boasts over 350 million users throughout China.
It has transformed the once social platform into a payment revolution, pushing the boundaries of social media use and going above and beyond the functionality of its competitors.
Why use WeChat Pay?
If you’ve read of our previous post introducing WeChat, you’ll be familiar with WeChat Pay. Why can’t we stop talking about it? The figures speak for themselves – according to a recent article by Tech In Asia, nearly half of all China’s e-commerce sales are made through mobile payments, and by 2019 it is predicted to be as high as 71 percent.
That’s over 500 billion dollars-worth of handbag, holiday and fast-food orders all taking place through a few taps on a mobile. And Chinese consumers are not just spending money in their home country. Results from a Cross Border Management analysis demonstrate that around 19,000 Chinese tourists visit Australia weekly with the average spend a whopping $8000 per person. Chinese e-commerce is booming, and there’s no reason why you shouldn’t be a part of it.
WeChat Pay has grown to become a forerunner in the mobile e-commerce market, due to its low transaction fees, excellent UX and availability on Android, iOS, Blackberry and Windows.
Ultimately WeChat Pay's biggest selling point is its never-ending functionalities. It has customers to sort out utility bills, order dinner, send each other money and arrange transport all in one place.
How does it work?
Most Chinese companies have a WeChat Official Account, which allow customers to shop for their services online directly. However, if you don’t have a company registered in mainland China, you will have to go through a third-party provider such as Airwallex to allow you to register a WeChat Merchant Account.
Whether you have an app, website, or brick-and-mortar store, getting a WeChat Merchant Account will enable WeChat Pay as a payment option, so that anyone who has WeChat on their phone can pay for your services using the app.
There are four ways a consumer can use Wechat pay: user scanning retailers QR code, retailers scanning users QR code, in-app payments and red pockets.
QR code payments
WeChat’s functionality revolves around QR codes, a sort of user barcode which sends information back to the app. They are used for adding people to chat with, but also for payment purposes. When someone adds a wallet, they create a unique QR code for it which can be scanned when the customer goes into a store.
This sends information of the purchase to the app, and when the customer confirms it will create an invoice from ‘WeChat friendly eftpos’. The only difference between a QR code and the barcode on a credit card is that the QR code changes after every purchase to guarantee a higher level of security.
For online merchants or cross-border retailers who do not have face-to-face encounters with their customers, QR codes are used in the reverse direction. You provide a code on your site or on an advert which the customer can scan.
Third party payment companies like Airwallex can provide APIs which will enable e-commerce retailers to add WeChat Pay QR codes to their site.
Payments can also be made within the app from WeChat Official Accounts (see our WeChat Official post for more information). Either users can buy products from your WeChat Official online shop, or they can be taken to your company’s WeChat Payment page while browsing your partner site or app.
People are also using e-red pocket as a means of paying each other. Check out this post which has a more detailed explanation on e-red pockets.
WeChat Pay makes taking your business global easy: along with CNY it supports eight international currencies and no overseas business license is needed. With its functionalities and user-base growing exponentially, we anticipate its use to spread globally in the imminent future.