Mobile payment is having a hard time going global: Scanning is not popular, and credit card payment is also upgrading

The fact is that the majority of people who use Alipay or WeChat Pay abroad are still the huge domestic "outbound tourism" group.

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With the popularity of e-commerce and social red envelopes, domestic consumers have regarded using their mobile phones to "scan" to buy coffee, ride bicycles, and order takeout as a normal part of their lives. The "two oligopolies" in China's mobile payment field - Alipay under Ant Financial and WeChat Pay under Tencent's Tenpay - have begun to accelerate their overseas layout.

Since conducting payment business in other countries requires obtaining a financial license, cooperation with local companies that already have a license has become the mainstream way to promote mobile payments. In March alone, both parties took frequent actions: on March 21, the e-wallet DANA jointly launched by Ant Financial and Indonesia's Emtek Group was officially launched; on March 26, WeChat Pay cooperated with Singapore's NETS Electronic Payment Company, allowing local NETS users in Singapore to scan WeChat QR codes to pay in the future.

In other words, whether through third-party payment companies or bank card clearing agencies, Tencent and Alibaba want to replicate the "Indonesian version of Alipay" or the "Singaporean version of WeChat Pay" in more countries.

Judging from the number of countries it has expanded into, Alipay currently has a first-mover advantage - *** data shows that Alipay has covered 38 countries and regions and hundreds of thousands of merchants around the world; WeChat Pay has also landed in more than 25 countries and regions, covering more than 250,000 overseas merchants worldwide.

But the giants want more than that.

One fact that cannot be ignored is that the majority of people who use Alipay or WeChat Pay abroad are still the huge domestic "outbound travel" group. According to the white paper "2017 China Overseas Tourism and Consumption Trend White Paper" released by Nielsen in February this year, about 65% of Chinese tourists use mobile payment when traveling abroad, while non-Chinese tourists only account for 11%.

It can be said that the target customer group for giants to promote mobile payments in overseas markets will definitely not be just Chinese tourists traveling abroad. Instead, how to localize products in other countries and establish a good product experience will become the only way for giants to promote mobile payments.

The "Scan" function that is not suitable for local conditions

In March, taxis with Alipay logos can be seen everywhere in Singapore. Open Alipay locally and you will see a wide variety of discount coupons, supermarket recommendations, and tax refund entrances. In Singapore's busiest commercial street, Orchard Road, walk into any store and you will see Alipay or WeChat Pay signs quietly "declaring" sovereignty.

However, when Titanium Media visited several merchants, they all said: "The majority of people who scan the QR code to pay are Chinese, and locals rarely use mobile phones to pay."

Although mobile payment can be promoted in overseas markets through institutional cooperation, mobile payment tools still face many obstacles during the product implementation stage.

On the one hand, different countries have different policies on transaction settlement systems, and most overseas banks are also skeptical about the settlement business undertaken by payment platform transfers. This will create an embarrassing situation where there is a "payment tool" but no card to bind, which invisibly raises the user's usage threshold.

“Many banks in Singapore do not support online transfers from e-wallets to bank cards. Users can only spend money through e-wallets, and need to go to the bank to withdraw cash.” An industry insider who runs a third-party payment company overseas told Titanium Media.

The formation of user habits is another barrier. For developed countries such as Europe and the United States, the well-developed and sound credit card system has been accepted by consumers, and people are full of doubts about the security and data privacy of the "scan" payment method; in Southeast Asia and other places, cash is still the most popular payment method. According to a survey by PayPal, 90% of Singaporeans said cash is their preferred payment option.

Alipay QR codes are posted in all stores located in Orchard Road shopping malls in Singapore.

Mandy is a post-90s Chinese born in Singapore. As a person who grew up using Facebook and Instagram, Mandy's daily payment methods are still mainly credit cards and cash. When talking about China's QR code payment, Mandy is a little confused: "Credit cards are already very convenient, why do we still need to scan?"

This seemingly simple question has become the primary problem for giants to promote mobile payments to users in developed countries. Unlike the situation in China where Taobao is used for e-commerce, Didi is used for taxi-hailing, and WeChat is used for social networking, the fragmented market in 11 Southeast Asian countries requires Alipay and WeChat Pay to spend more energy and resources to reach cooperation with leading Internet companies in various regions, and use the usage habits of mobile applications to force overseas users to "throw away" credit cards.

Localization strategy for payment tools

In the complex overseas markets, major companies in the payment field are trying more means to advance their strategies.

At the Money 20/20 Asia, a global payment and financial services summit in Singapore, Ant Financial CTO Cheng Li talked about the group's strategic layout for promoting inclusive finance overseas. In addition to promoting offline payment outlets, Ant Financial will also form a platform based on its past technical accumulation in the fields of cloud computing, AI, and blockchain, forming a BASIC financial basic technology strategy (blockchain, artificial intelligence, security, Internet of Things, and computing) to empower merchants and partners.

Faced with the wave of mobile payments, credit card manufacturers are also continuously upgrading new payment methods.

At the Mastercard exhibition area at Money 20/20 Asia, Titanium Media saw the most popular credit card payment method.

Fingerprint recognition is an innovative reform of traditional credit cards by MasterCard in 2017. With the new fingerprint recognition chip on the upper right corner of MasterCard credit cards, consumers can complete payment by pressing their fingerprints when swiping the card, just like using Alipay or WeChat Pay, thus replacing the cumbersome steps of password verification.

It is not difficult to apply for such a credit card with a fingerprint recognition chip. Consumers only need to register their fingerprints at the bank, and the fingerprint data will be encrypted and stored in the card. The card can be used in existing card readers equipped with EMV chips (EMV is an internationally accepted financial IC card payment standard), but cannot be used in card readers equipped with only magnetic stripes.

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MasterCard launches a credit card that supports fingerprint recognition

In addition to biometric technology represented by fingerprint recognition, Mastercard also showcased another IoT "payment of everything" concept product: smart ring payment.

This is not the first time that Mastercard has demonstrated this technology. At the Money 20/20 event in Las Vegas in 2015, Mastercard proposed "payment by everything", which is to use the IoT products that consumers will carry with them in the future, such as sports bracelets, car keys, smart rings, etc., to verify identity information through implanted payment modules, and make payments instead of credit cards.

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In the view of Ling Hai, co-president of MasterCard Asia Pacific, the new mobile payment methods launched one after another are more like tests based on consumer behavior. Ling Hai took the difference between Australian and Chinese consumers as an example: in Australia, people tend to use NFC (near field payment) such as Apple Pay, so it would be difficult to promote QR code payment suitable for Chinese consumers in the local area.

“The markets of different countries need to be treated differently. Technology is not necessarily universally applicable. We are now working with our customers to try out more different technologies,” Ling Hai told Titanium Media.

In addition to innovating in payment methods, "data" is another type of resource that large companies must delve into.

As the world's second largest credit card issuing organization, MasterCard provides services in more than 210 countries, and its consumer portraits around the world are naturally regarded as valuable data resources. The promotion of biometric technologies such as fingerprints and faces and the development of wearable devices are also to obtain consumer behavior trajectories from more dimensions while maintaining data privacy.

"A wider range of transaction methods can make payment itself more convenient and secure, and consumers can also build a user portrait when using mobile phones, smart wearable devices, facial recognition, and fingerprint payment. We can also understand the consumption behavior habits of users in different countries, help them improve their user experience and provide better services." Tobias Puehse, vice president of Digital Payments and Innovation Lab in Asia Pacific at Mastercard, told Titanium Media.

However, most of these new payment methods that rely on biometrics and smart wearables are still in the trial stage, and MasterCard has only launched the above functions in a small number of countries. Among them, the fingerprint chip credit card was launched in 2017 and is currently only being piloted in South Africa. It is planned to be promoted to the Indian market, and there is no plan to enter the Chinese market in the near future.