Chinese citizens have not had to live a transition model from physical to virtual money . Despite some exceptions, credit and debit cards were never fully adopted in the country. So, after the irruption of the smartphone , the possibility was opened that most of the transactions no longer had to be carried out with cash.
Unlike in the West, where we can still use credit cards (which in turn slows down the adoption of smartphone payments), small Chinese family businesses have begun to scan with their terminals the QR codes that customers show with their own smartphone . And they do so with the conviction of those who never had point of sale terminals or POS terminals to process card payments.
Thus, the speed of implementation of this payment system has been so spectacularly fast and widespread that even beggars use it to beg .
WeChat and Alipay
During 2015 and 2016, companies Tencent (WeChat) and Alibaba (Alipay) gradually introduced QR codes , a square barcode that can be scanned with the smartphone to facilitate a cheap transaction.
Store owners don’t even need a specific device to display the QR code – just print it on a sticker or sheet of paper, link it to their account, and stick it on the wall or anywhere else. The customer will then use the Alipay or WeChat app to scan the code and enter the total payment, using the fingerprint of their smartphone to confirm.
No fees, funds are transferred instantly. WeChat is currently developing a payment system using facial recognition called Frog Pro. In 2017, Alipay had already launched its facial recognition payment service.
The fact that everyone has a smartphone together with the fact that there are no commissions in the transactions are the two main factors of success: the credit cards that tried to introduce years ago added fees of 2.5 to 3% in the majority of charges .
WeChat and Alipay, however, even allow free transfers between people. As Kai Fu Lee explains in the book Superpowers of Artificial Intelligence : “Easy and connected to a mobile, applications soon became tools to ‘give a tip’ to creators of articles or online videos. Micropayments grew of amounts as meager as fifteen cents ”.
65 percent of the more than 753 million smartphone users in China had activated mobile payment by the end of 2017. Cash disappeared so quickly from stores that even store robberies decreased. Kai Fu Lee adds: “There was a point where beggars on the streets of Chinese cities hung pieces of paper around their necks with the imprint of two QR codes, one for Alipay and one for WeChat.”
In 2019, WeChat had 1.12 million active users per month . Alipay is not far behind, and it also provides features such as bill payment, bank account management, prepayment of balance cards, purchase of bus or train tickets, purchase of food at home, payment of insurance or storage of digital identification documents.
In Spain, more and more businesses are beginning to accept these platforms to make payments due to the influx of Chinese tourists. Alipay has also reported that it will open its platform to tourists traveling to China. Its success, without a doubt, is overflowing the borders of the Asian country.
