Though WeChat started life in the same year as WhatsApp back in 2010, the messaging platform has since evolved into China’s “app for everything,” offering virtually limitless tools and possibilities for consumers in the territory. Just three years later, developer Tencent revolutionised mobile payments with the launch of WeChat Pay, a service that’s spawned the Western alternatives Apple Pay, Google Pay, and more. Allowing peer-to-peer transactions, in-app purchases and merchant payments, there’s no denying that WeChat has transformed the sector, and today it boasts more than one billion active daily users, with 70 million more users outside of the Mainland. If you’re looking to offer your products and services in the country, you’ll need to adopt and embrace WeChat Pay as soon as you arrive. Here’s why…
WeChat is one of China’s most popular payment methods
It’s not just millennials who are driving a cashless revolution in China - consumers of all ages and backgrounds have, in recent years, been taking to the app to make payments, favouring its safety and convenience over cash or a debit card. Consumers can use WeChat Pay not only inside of the app, but through QR codes to pay their household bills, buy goods in local markets, order tickets to shows, pay for their cab ride, and virtually everything else. What’s more, WeChat Pay integrates seamlessly with WeChat’s ecommerce platform, with vendors selling their goods directly inside of the WeChat platform, removing the need for their own websites or ecommerce stores. It offers consumers a straightforward shopping experience on their phones and allows businesses like yours to tap into a truly vibrant demographic.
Although AliPay is a close competitor, WeChat pay is growing fast, and you’ll see QR codes for the two methods everywhere you go in China. Accepting both is a good idea, allowing you to cover all bases. It’s similar to accepting both Apple Pay and Google Pay in the UK.
Virtually all devices support WeChat Pay
Whether you’re selling face-to-face at a Chinese exhibition or simply selling online, it’s good to know that WeChat Pay works on virtually every mobile device in China. WeChat has been installed on more than 90% of mobile phones in the country, and consumers spend 43% of their daily mobile time inside of the app, demonstrating the brand value WeChat holds. The truth is, if you’re not accepting WeChat Pay, consumers will become naturally suspicious of your brand. Though rival payment methods are available, WeChat Pay is widely embraced.
What’s important to know, however, is that the WeChat Pay experience works best on mobile and inside of the WeChat app. Therefore, you should list your products for sale on an ecommerce Mini Program inside of the WeChat app, and if you’re offering a physical product or experience, tie that into your program. Some say that WeChat Pay is difficult to use on a website. Users have to scan a QR code and authorise access to process the payment, so it pays to develop an app or program that will reduce friction and streamline your sales funnel.
Transaction fees are surprisingly low
Despite WeChat’s dominance in the mobile payments market, its fees are surprisingly low for merchants and consumers. Users don’t pay fees for sending money to friends or family, or for buying goods or services, but they do pay a fee when they withdraw more than RMBY 10,000 from their account - this fee is nominal, however, at around 0.1%. Low fees are another reason why WeChat Pay is favoured over credit cards and platforms like PayPal. As a small business, you’ll pay significantly less to accept payments on WeChat than you would if you were using PayPal or accepting credit card payments. At present, WeChat Pay takes a 0.6% commission on payments, which is generous when you factor in the strong security processes, making fraudulent payments much less likely than via credit and debit cards.
Chinese consumers use WeChat Pay overseas
Though international travel isn’t at the top of many consumers’ priority lists right now, it’s important to note that an increasing number of shoppers expect to use WeChat Pay when they are overseas. AliPay, which holds a 55.4% share of China’s digital payments market, has a strong presence internationally, but WeChat Pay is growing across the globe. Chinese payment vendors have to comply with strict legislation imposed by the local government, but it has begun to expand into new markets, including the United Kingdom and the United States. You can see a full breakdown of current supported countries here but bear in mind that WeChat Pay only accepts Chinese yuan and the US dollar currencies right now, so if you are targeting Chinese consumers at your UK store, you’ll need to factor this into your pricing and promote products accordingly. Pushing WeChat Pay with a sticker can be a great way to entice more Chinese shoppers into your premises, especially in a tourist hotspot.
Embracing WeChat Pay is critical if you want to boost your presence in China, and building a mini-program to accept ecommerce payments makes sense. If you need a hand, depend on the time-served experts at Zudu China, with experts on the ground in Dundee and Shanghai.