Have you ever canceled a purchase because the payment method did not work for you? No company wants to lose potential customers at the finish line. Due to the enormous market penetration of WeChat's payment service, this hardly happens in China: The smartphone has become a wallet.
Companies in Europe are recognizing the enormous potential of the high-turnover Chinese market and are beginning to make it as easy as possible to spend money for Chinese citizens. This is especially true when this promising market is a regular guest. For example, purchases can now be made in more than 70 shops at Munich Airport using the app's payment service. The many possibilities of WeChat Pay are by no means limited to mainland China anymore. While companies that are active only in the West may not need to integrate WeChat and its many features into their communications and sales strategy (yet), this is not an option for companies already active or planning to become active in the Chinese market.
In Europe, a variety of payment options has been established. While transactions are still often paid by cash or credit/debit card and with the newer Near Field Communication (NFC) technology via smartphone or cash card in physical stores, e-commerce offers another set of options. In addition to direct bank transfer and credit cards, the online payment service PayPal should be mentioned here in the first place. As a company, you have to offer customers across Europe many payment methods to complete transactions. The problem: These payment methods do not work for all customers in China. From multinational companies to street food vendors: They all use WeChat Pay today.
WeChat Pay: Anywhere Anytime
The motto of WeChat Pay is anytime, anywhere. As a fully integrated payment service, it can be accessed via the menu item "WeChat Wallet". A wide range of transactions are possible among users:
- Money transfers among friends
- Transactions on e-commerce websites
- Paying bills (including utility bills, etc.)
- Ordering and paying for cab rides
- Paying train and plane tickets
- Hotel bookings
- Investments in asset management funds
- Paying for purchases in shops etc.
In addition to a WeChat account, a Chinese bank card was needed to use the payment service. Meanwhile, the service also accepts international credit cards. This allows companies outside the Chinese market to offer this payment method (for example in e-commerce). Nonetheless, companies need an official WeChat account to offer products and services through the app. This requires either a Chinese business license or a trusted partner agency. We are happy to advise you personally on this.
The WeChat Red Envelope function is primarily used for transactions among friends (see below). There are four options for commercial transactions:
- Web-based payment in the app
This is the most common option. It can be easily integrated into WeChat shops. Users can purchase a product via an integrated WeChat Pay Button. To do this, they must authorize the purchase by simply entering their WeChat Pay password or their finger scan (if the smartphone has this feature). Unlike PayPal, for example, users are not redirected to the service's website to log in there. The complete transaction takes place within WeChat, providing a homogeneous user experience. - Integration into external apps
WeChat Pay can also be integrated into other apps via the Software Development Kit (SDK). If this method is selected, WeChat Pay will open. When the transaction is completed, users are redirected to the external app again. - Via QR code
QR codes are widely used in China and are also an integral part of WeChat. WeChat Pay typically uses them when people shop on a desktop website. In this case, a QR code is automatically generated during the payment process, which users scan with their smartphone camera from within "WeChat Wallet". - Quick Pay
The Quick Pay function is used in points of sale. It is thus in a sense the Chinese counterpart to the NFC method. The user must access the Quick Pay option in their WeChat Pay Wallet. A QR code appears, which must only be scanned by the cashier to complete the process.
WeChat Red Envelope
Gifts of money are very important for the Chinese New Year Festival. Traditional red envelopes, the hóngbāo, are used for this. Friends and family can exchange the red envelopes with each other in WeChat as well. The limit for this feature is about 33 euros. With the introduction of the WeChat Red Envelope, Tencent has successfully updated this old Chinese tradition for the digital age. More than 46 billion red envelopes were sent via the app in 2017 - and the trend continues to rise.
Brands have discovered the feature for themselves. This is a good opportunity to do market-specific marketing for businesses. For example, companies can use red envelopes to give customers small amounts of money or product credits. Even the smallest amounts can have a big impact here and strengthen the brand image - especially when compared to the budgets that are usually required to advertise in the app.
Read more about Digital Marketing in China.
