Apple Pay, Google Pay – many of us have no idea that the true ‘pay’ giants are sitting in Asia. Your mobile apps manage the daily lives of millions of users. First and foremost, the services WeChat and Alipay.
Why the Chinese platforms are superior?
Chinese platforms WeChat and Alipay offer their customers not only payment services, but digital universe that no longer have to leave the user in the course of a normal day.
WeChat is operated by the Tencent Group and launched in 2011 as a messenger app. Today, WeChat is an ecosystem that offers its users all imaginable digital services. Including WeChat Pay also a payment service. He uses more than 800 million people every month. By comparison, Apple Pay has 127 million users.
Alipay was created as a payment service by Alibaba, the Chinese Amazon. Alipay is no longer just a financial app, but with more than 700 million active users, it is one of the largest payments and lifestyle platforms in the world.
Together, the two platforms handle as many payments a month as PayPal does in a year.
WeChat was initially a social network. All around, services and solutions have gradually been built that are of high relevance to many Chinese people, from getting up to going to bed. Much of it is about gaming and entertainment, but WeChat Pay is also about finance, and there is also a dedicated sales platform.
One can imagine WeChat and Alipay as a mix of WhatsApp, Facebook, Lieferheld and MyTaxi and many more services. With very different privacy policies in China, corporations are able to create detailed user profiles and make the right offerings.
Alipay and WeChat are the digital mirrors of analogue life.
As a regulated financial services provider, Alipay also provides all the services of a bank: banking, asset management, investment, lending, insurance and payments.
Alipay lends 20 percent of its revenue. Through his consumer or dealer credit Alipay has fueled the consumerism of the Chinese in the first place and promoted.
How could the Asian payment apps get so big?
Google, Apple and Amazon have been around since the ’70s and’ 90s. Alipay and WeChat started later, but with their growth rates they are leaving the American corporations and their payment solutions far behind.
How can it be that US companies are lagging behind in mobile payment even though they came first?
Alipay and WeChat started on the green field. In China, there was no banking infrastructure like ours, no credit or gyro cards, no learned processes. China jumped directly from cash to mobile payment, from the marketplace to e-commerce.
20 years after its founding, PayPal has partnered with Google Pay to make it available in the offline world as a means of payment. In China, “multichannel” went immediately, on all levels and without detours.
When we talk about mobile payment, we mean, above all, payment in e-commerce or at most at the supermarket checkout.
The mobile payment apps in China are ubiquitous; You basically do not see young Chinese people with their wallets or cash. Everywhere you can find payment app suitable QR codes.
When Alipay and WeChat grew up, many Chinese already had a cell phone, but never a computer. Unlike ours there was no long migration period; everything happened from zero to 100.
Lifestyle content and payment functions were thus immediately linked to each other for the customers. And these customers were in turn hungry for consumption and innovation after many years of planned economy.
Western platforms have no space in China
As the icing on the cake, this development was promoted by the state, while at the same time providing relative entrepreneurial freedom.
And the market foreclosed against foreign companies. Google, Apple, Yahoo , Groupon: They have failed as independent providers and platforms in China.
Nevertheless, in order not to miss the many billions of consumers in China, some of these corporations are now resorting to questionable means. Apple, which positions itself as the guardian of freedom in the West, is now willing to let the Chinese government read its own operating system.
Who wants to cooperate with WeChat and Alipay, can do that? As a junior partner, fueling growth and accepting the rules.
What does that mean for Europe?
European consumers will continue to use a more heterogeneous offer, and the conditions are too different.
But we should still look at a few aspects, especially at the product level: If one wonders why mobile payment systems in Germany have such a hard time, then this is often due to the lack of added value for the customer.
Imagine, with a savings bank app you can not only pay, but also order a taxi or you get the movie ticket that you book through the app, ten percent cheaper.
The payment, which is annoying every customer, then disappear into the background and would no longer be the only reason to open a payment app at all.