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Government policy at that time heavily encouraged the growth of the e-commerce sector, thus adopting laissez faire tactics conducive to rapid growth.Įnjoying this article? Click here to subscribe for full access. When the mobile payment applications were first getting off the ground, authorities were very hands-off in dealing with these operations, both due to a lack of familiarity with the new technology and the initial small size when compared to the banking sector. Another factor in the success of online payments was the relative lack of regulation in that space in China at the time these platforms were being built. Get the NewsletterĬhina had largely been a cash economy prior to the large-scale introduction of the QR-code system, and many vendors had not yet installed the point-to-point terminal infrastructure that would be required to process credit card payments.

Get briefed on the story of the week, and developing stories to watch across the Asia-Pacific. Such a phenomenon is analogous to China’s de facto bypass of the email system, with instant messaging apps such as WeChat being the preferred manner of communication even in business contexts.

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It devised a scheme whereby friends could create virtual red packets that their friends or family would then be able to open, with a larger share of the total pot awarded to those who opened the packet the quickest.Ī major driver behind the rapid adoption of mobile payment systems was the lack of credit card infrastructure in China at the time of the smartphone revolution. With Alipay already commanding a huge space in the mobile payments market at that time, Tencent (WeChat’s owner) needed a clever way to induce WeChat users to link their bank cards with the app, thus becoming WeChat Pay customers. As the preeminent Chinese holiday, the Spring Festival has long been characterized by a tradition of exchanging money in “red packets” ( hongbao) between friends and family.

The payment feature on the social media platform WeChat, meanwhile, had its origins in the 2014 Lunar New Year festivities. Though initially limited to Taobao, Alipay quickly moved to providing its escrow services for other online platforms as well by 2004, and continued on a growth trajectory that saw it encompass 81 percent of domestic consumers by 2020. This was the birth of the Alipay function. In order to overcome this deficiency, CEO Jack Ma designed a system wherein the buyer’s payment would be held on the platform in escrow and only released to the seller’s account after a satisfactory product had been received. In 2003, Alibaba’s online customer-to-customer platform Taobao (similar to an auction-less eBay) faced a crisis in confidence: buyers had no method to ensure sellers would deliver a quality product once a payment had been made. The growth of the internet planted seeds of change that would upend that default.

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As recently as the turn of the century, Chinese citizens largely depended on these bills adorned with the face of “Grandpa Mao” for all offline purchases. For a small number of payments you will not receive an immediate confirmation, and will need to rely on a webhook notification to confirm whether the payment was successful.Since the founding of the People’s Republic of China in 1949 (and even prior to that), cash has always been king in China.

To support payments from your mobile website, you can use WeChat Pay official account payments or in-app payments.įor most WeChat Pay payments, you receive an immediate confirmation of whether the payment was successful. You can accept WeChat Pay payments on your:įor mobile websites, only payments that are initiated from the WeChat app are supported. WeChat Pay has over 900 million active users every month, making it a key payment method for businesses that want to reach Chinese shoppers. App users who have bank accounts in China can link their accounts to their profiles, so they can make online and in-person payments with WeChat Pay. WeChat is an instant messaging, social media, and mobile payment app widely used in China. Learn about pricing and settlement services for WeChat Pay on.