Chinese payment giants Alipay and WeChat Pay plan to open their platforms to foreigners visiting China as regulators ease restrictions.
The apps, which dominate payments across the world’s second-largest economy, announced the plans in rapid succession after previously requiring users to have local accounts.
Opening up to foreign visitors may give an incremental boost to spending on the platforms – but for overseas firms, it has big implications, potentially helping pave the way for future adoption abroad.
Although there will be some revenue coming from the foreigners using the card, the more interesting aspect is how seamless the cross-border Alipay and WeChat Pay experience is becoming,” said research consultant Kapronasia’s founder and director Zennon Kapron.
Behind the scenes, China’s central bank recently told a number of payment firms they will soon be allowed to plug foreign cards into their apps for use in China, according to two people with knowledge of the matter.
Previously, regulatory concerns about money laundering and cross-border cash flows had prevented that from happening.
The central bank offered no immediate comment to an inquiry sent by fax.
The move will provide relief to some of the more than 30 million people who visit China annually and sometimes struggle to find alternative payment methods.
The move will provide relief to some of the more than 30 million people who visit China annually and sometimes struggle to find alternative payment methods. Alipay and Tencent Holdings, which runs WeChat Pay, account for 94 per cent of the country’s mobile payment market. To be sure, the ability to work with credit cards is still pending.
In its announcement, Ant Financial’s Alipay laid out a system that will work around current restrictions and can start immediately. Alipay said it is letting travellers use a prepaid card service provided by the Bank of Shanghai. That means customers will have to periodically top up that account, which will be limited in amount.
In contrast, WeChat Pay intends to let people more directly connect their existing cards to its app. Visa described that plan in a statement of support yesterday, saying it will essentially enable its cards to work across China.
“This is a great step forward, both for consumers travelling to China and the overall payment industry,” Visa said. “This partnership means we’ll be working towards an environment where Visa cardholders will be able to use their Visa card in China at the millions of places where WeChat Pay is accepted, instead of having to rely on cash.”
Tencent said it has been discussing cooperation with American card network operators Visa, Mastercard, American Express and Discover as well as Japan’s JCB to support the linking of overseas credit cards to Wechat Pay.
View source: https://www.straitstimes.com/business/companies-markets/alipay-wechat-pay-to-open-apps-to-foreigners