Having already established itself as a major payments player within its home market, China’s dominant mobile platform, WeChat, has set its sights on global expansion, with a particular focus on payment solutions for globe-trotting outbound Chinese tourists.
Launched in 2014 to allow users to send digital “red envelopes” (worth small amounts of money) to friends during Chinese New Year, the use of WeChat Pay has grown exponentially over the past two years, with more than 8 billion digital red envelopes sent during Chinese New Year in 2016.
Having successfully rolled out these types of campaigns to incentivize its users to link their bank and credit card accounts to their WeChat accounts, WeChat Pay has built a robust business inside of China, allowing its users to pay for a host of goods and services. Aside from sending virtual red envelopes, WeChat Pay users can:
-Hail and pay for taxis & car-sharing services
-Make offline payments at brick-and-mortar stores
-Pay medical fees
-Buy Fast food (e.g., McDonald’s)
-Make WeChat m-commerce purchases
WeChat recently announced that its WeChat Wallet service now supports transactions in nine currencies, including the Euro, US Dollar, Japanese Yen, New Zealand Dollar, Australian Dollar, Canadian Dollar and Great British Pound. This will allow overseas vendors to accept payments in their local currency, which are funded from Chinese citizens RMB accounts in China.
This allows for Chinese customers to spend money overseas without transferring money outside of China – a prospect that is getting more and more difficult for Chinese citizens as of late.
WeChat Pay has already been rolled out internationally in a number of Asian countries, and is going global at a rapid pace.
-In Malaysia, Thailand and the Philippines, users can pay for taxis using WeChat Pay.
-WeChat Pay has been integrated into e-commerce apps such as Lazada and FoodPanda in Asia.
-Through collaboration with Naspers, WeChat rolled out its international payments solution in South Africa, allowing users to send and receive cash via WeChat Wallet, withdraw cash from ATM machines and pay any SnapScan merchant.
While we have not yet seen any vendors roll out this service in Europe, the United States, or Canada, we expect to see retailers, tourism destinations, hotels and cultural destinations begin to adopt WeChat Pay as an integral part of their payment solution for Chinese travelers in the near- to medium-term.
Retailers, destination attractions and hotels in Europe and the US are already leveraging WeChat’s robust and customizable functionality to engage Chinese outbound travelers, improve customer experience onsite, and develop sophisticated CRM solutions to communicate with Chinese travelers as they explore the world.
The ability to now accept payments will truly make WeChat the go-to app for engaging Chinese tourists worldwide.