The Chinese outbound market is booming yet travelers still find low acceptance of their typical payment methods. As travel becomes more accessible to the Chinese lower and middle class offering payment methods such as AliPay and WeChat Pay will be a definitive competitive advantage.
Last week we launched the latest report in our Skift Research service, The State of Consumer Payments in Travel 2017.
Below is an excerpt from our Skift Research Report. Get the full report here to stay ahead of this trend.
“Chinese are traveling all over the world and they want to pay with AliPay and WeChat Pay” said Pieter van der Does, CEO of Adyen, at a recent conference.
The growth of the Chinese outbound travel market is significant due to a variety of reasons, among which are cultural, political, and economic. Beyond the simple fact that a 15 percent growth of Chinese outbound tourists is roughly 17 million more travelers, the cultural differences are significant and are also reflected in the Chinese payment landscape.
While currently the majority of Chinese outbound travelers are still the richer upper class, who are allowed to have Western credit cards, Chinese outbound tourism is growing at a rapid pace and younger and more middle-class Chinese are beginning to travel abroad.
China is one of the few countries where Western credit cards don’t represent a major part of the payments landscape, as the Central Bank of China held a monopoly on the issuance of payment cards. Although credit card acceptance has become more popular over recent years, it’s mostly to cater to tourists visiting China and the issuance of Western credit cards to Chinese is still in the works and was a topic of discussion at the Mar-a-Lago meeting between President Trump and President Xi Jinping. The three leading payment options in China are AliPay, UnionPay, and WeChat Pay.
- 889 million WeChat users
- 200 million users making payments
- $1.2 trillion in transacations per year
Unlike in the Western market, where mobile payments via messaging apps arguably haven’t had a major penetration, in China WeChat is one of the largest payment platforms. What may have started out as a copycat version of WhatsApp has evolved to ideally cater the Chinese market and has become a stronger player in payments every year.
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