"When we first visited China 10 years ago, cash was still the main form of payment, and we exchanged a lot of renminbi before we set off for emergencies. In the blink of an eye, in 2023, I came to China again as an international student, and everyone was paying with their mobile phones, and the cash in their hands was getting less and less. Laura (not her real name), an American student at Peking University, is experiencing first-hand the changes in payment methods in China.
It is the past ten years that Laura has experienced, China's mobile payment technology has developed rapidly, people's daily payment methods have undergone earth-shaking changes, the financial market pattern has also been reshaped, and even increasingly become a bridge in cross-border business activities and people-to-people exchanges. According to the data disclosed by the People's Bank of China, the current mobile payment penetration rate in China has reached 86%, which is at the international leading level.
Recently, the optimization of payment services has risen to the deployment level of the highest level, and then the People's Bank of China has guided payment institutions to carry out detailed work. What is the difficulty of foreign visitors to China? What kind of solutions will be given by payment-related entities?
Payment experience for 13 international students.
In her second year of studying abroad in China, Laura is still amazed by the various "tricks" of payment methods in China. "To be honest, I was scared on the day I entered school. I need to go to the bank to apply for a new Chinese bank card at the same time as I go through the enrollment procedures, and then bind it to WeChat for real-name authentication. I've never tried this process, but I had to get it done on the first day of school, after all, I had to add money to my school card. Laura confessed.
Like Laura, foreigners who come to China inevitably "follow the local customs" in terms of payment methods. According to a questionnaire sent by a reporter from Beijing Business Daily to 13 foreign students at Peking University, 13 people 100% regard WeChat and Alipay as the first choice for daily life payment, followed by new domestic bank cards and cash after coming to China, and finally wild cards.
The first payment difficulty in front of several international students is to open an account, bind a card, real-name authentication and other issues. "At first, I had some problems with my passport, so I couldn't use WeChat Pay or Alipay because it needed to be verified. Luca (not her real name), an international student, said. Another international student, Linda (pseudonym), encountered a problem that "when I passed the real-name authentication, the bank staff linked my English name together to register, and I had to go to the bank again and add the space between the names."
In addition, some international students reported that when the full name of a foreigner exceeds 26 characters, there will be a problem that real-name authentication will occur, which will limit the functions of WeChat payment, transfer, and red envelope. In addition, Laura also mentioned that perhaps because she has been in China for a short time, her "WeChat Pay credit score" is very low, and she is unable to open the vending machine that needs to be credited.
In fact, international students usually have Chinese temporary residence permits and domestic bank cards, and they have a high demand and enthusiasm for the use of mobile payment, and can quickly adapt to the domestic payment environment. For foreigners who come to China for short-term tourism and business, the problems they face include: if they use mobile payment, the card authentication process is cumbersome, the operation steps are not familiar, there is no mobile network, and the concept is agreed. If you use a foreign card or pay in cash, there will be a situation where small merchants and small stores will not be able to accept it.
Judging from the experience of several of my friends who have traveled to China, they have encountered many more difficulties. Linda said. For example, WeChat and bind it to their foreign number, and their account will be blocked in a few days. 3 Chinese must be found to verify their accounts. It's hard because of the language barrier and they probably don't know any Chinese. If a foreign card is bound, WeChat and Alipay will be restricted from paying to individual merchants. However, if you only have a passport and do not have a Chinese bank card, you will not be able to transfer money or send red envelopes.
At present, China has established a payment and clearing system with extensive coverage centered on the first-class bank payment and clearing system, with the participation of commercial banks, clearing institutions, and non-bank payment institutions. At present, more than 4,000 commercial banks and more than 180 payment institutions have effectively met the needs of 1The payment needs of 600 million business entities and hundreds of millions of consumers. However, in the view of Luca and others, China's mobile payment is convenient and easy to use, but for foreigners, it is also necessary to improve the compatibility of WeChat and Alipay with foreign cards and numbers, and simplify the binding process.
The People's Bank of China has also conducted a survey on the inconvenience of payment for foreign visitors to China. According to Zhang Qingsong, deputy governor of the People's Bank of China, he said: "It can't be used, and some foreign friends can't tie overseas bank cards; It is not easy to use, and some foreign friends spend more than a certain amount and cannot pay the bill, so they feel that it is not easy to use. ”
Binding of external cards and "outsourcing for internal use".
Let mobile payment products, the most accepted payment method of the Chinese people, be easy to use and use, so that foreign friends are satisfied and willing to use it", this is the new plan proposed by Zhang Qingsong. For small-amount and high-frequency payment scenarios such as daily catering services and retail life services, mobile payment institutions are more handy.
The variety of payment forms in China provides consumers with a variety of choices, and according to the interviews with Laura and others, the most commonly used payment methods abroad are still bank cards and cash.
The inconvenience of foreigners to pay in China is mainly affected by the restrictions on the binding of mobile payment tools, the insufficient acceptance scope of overseas bank cards, and the differences in payment habits. In the face of an interview with a reporter from Beijing Business Daily, Lakala pointed out that the mainstream foreign payment methods are mainly chip transactions and card transactions of physical credit cards, while the mobile terminal is mainly bound to overseas bank cards with Apple Pay and Google Pay; In China, it is mainly based on *** code scanning transactions, and it is inconvenient for domestic software to bind overseas bank cards. For example, foreigners need to enter the 2-3 floors to operate when using bank card binding, and some of them are still Chinese interfaces, and foreigners cannot accurately fill in the content.
At the same time, the privacy concerns of Luca and others have also conflicted with China's rigid requirements for financial compliance. China UnionPay pointed out that from the perspective of experience optimization, when foreign people in China apply for domestic online payment wallets, they need to enter personal information in accordance with the KYC (Know Your Customer) policy, which conflicts with its privacy protection concept, so the current application, activation and usage rate is low.
According to Pan Helin, co-director of the Digital Economy and Financial Innovation Research Center of Zhejiang University International Business School, the main purpose of many financial institutions' current measures for mobile payment services for foreign visitors to China is to gain customers. However, some institutional problems still exist for foreigners to handle mobile payment, such as some financial institutions need a domestic mobile phone number and a domestic ID card to handle mobile payment, which is not friendly to foreigners who hold passports and do not have domestic mobile phone numbers and communication tools. Therefore, in order to optimize payment services and improve the convenience of foreign people to pay in China, it is not just a payment industry to improve, but also needs the joint efforts of communication operators, social platform companies, and financial institutions.
In an interview, a reporter from Beijing Business Daily learned that "external card internal binding" and "outsourcing internal use" are common solutions in the current industry. Or directly support some overseas e-wallets to scan the code to pay.
In addition, in response to problems such as foreigners who do not understand the language of card binding and pay attention to privacy information, Alipay and WeChat have optimized the registration method, opening process, and operation experience. Among them, WeChat Pay provides a variety of security verification methods, and currently supports compatibility with multiple formats according to the characteristics of foreigners' name formats. If you need to change the authentication information, you can modify the main information without canceling the original real-name account.
Alipay, under the guidance of regulators, has launched a pilot project for overseas users to pay without identity authentication, but it still needs to complete authentication after exceeding the specified limit. For authentication, it supports the authentication of six types of documents for foreigners, including: passport, Mainland Travel Permit for Hong Kong and Macao Residents, Mainland Travel Permit for Taiwan Residents, Residence Permit for Hong Kong and Macao Residents, Residence Permit for Taiwan Residents, and Permanent Residence ID Card for Foreigners.
Payment institutions transform offline equipment.
Since the end of 2023, with the successive release of policies such as expanding visa-free coverage and relaxing entry and exit visa conditions in China, the People's Bank of China has further proposed a solution of "large-amount card swiping, small-amount QR code scanning, and cash pocket" to optimize the measures for overseas visitors to China.
In addition to mobile payment, what are the constraints of payment methods such as credit cards and cash commonly used by foreigners in China? According to the 2023 MasterCard survey on wild cards in key business districts, in the four cities of Beijing, Shanghai, Guangzhou and Shenzhen, the coverage rate of retail and catering merchants is less than 40%, and the coverage rate of non-contact "card tapping" merchants is less than 30%. Spending by foreigners is mainly concentrated in accommodation (nearly 70%), and spending in retail, catering and department stores needs to be strengthened.
The reason for this is that Lakala pointed out that because the cost of foreign card acceptance terminals and rates is much higher than that of scanning codes, not all merchants are willing to accept international bank card payments, especially in tourist attractions or small businesses in non-first-tier cities, which may only support local bank cards or QR code payments. This is also the problem mentioned by Laura and others in the interview, small merchants in retail and other fields cannot accept foreign card swipes and cash.
Expats are in demand, and institutions in the payment field are also looking for a market. In view of the different payment habits of foreign visitors to China, acquiring and payment institutions start from the transformation of offline equipment and solve problems with product innovation. According to an interview with a reporter from Beijing Business Daily, Lakala has transformed the system of POS terminals to cover sensitive merchants with innovative foreign card acceptance tools such as tap to pay (contactless payment, that is, "card shooting") terminals; Jialian Pay supports POS terminals that accept international mainstream credit cards such as American Express, Visa, MasterCard, etc., and supports cardholders to choose foreign currency card payment methods; Instant Pay realizes remote upgrade to accept foreign cards of existing smart collection devices, greatly improves the transformation efficiency of offline terminals, and covers key merchants in popular foreign-related scenarios such as tourism, airports, scenic spots, etc., providing a more convenient, safe and efficient payment environment for overseas visitors to China. The card is directly connected to the mainstream international card associations, and foreign people who hold American Express cards can use the music brush machine to make purchases.
Focusing on the demand for cash payment, all ATMs of Bank of China support cash withdrawal from overseas bank cards, and 90% of its outlets, more than 1,300 cooperative hotels and airport exchange points can exchange foreign currencies, supporting 39 currencies.
In addition, institutional entities such as China UnionPay, NetUnion Clearing, and Mastercard also play different roles. Among them, China UnionPay provides different solutions for users who are accustomed to swiping cards, scanning codes, contactless payments, and those who do not have any financial products, so that they are compatible with online and offline, domestic and foreign, connected and non-connected, and card codes. NetUnion Clearing continues to promote the expansion of the coverage of "foreign card internal binding" and "outsourcing and domestic use", and actively carries out interconnection with overseas financial infrastructure. Relying on the extension of e-CNY to cross-border payment scenarios, Mastercard allows overseas visitors to China to use Mastercard to top up and spend e-CNY accounts.
Significant results have been achieved in the short term.
In the past two years, the action of optimizing the payment services of relevant groups has been significantly accelerated. "It's not just Laura who feels the changes in China's payment services, but also a number of payment industry practitioners who have talked about their feelings in interviews.
Mastercard also mentioned in the interview that the payment environment for overseas visitors to China is indeed improving, but if it can focus deeply on the coverage of key merchants, it can better stimulate tourism-related consumption and promote high-level opening up.
Recently, under the concentrated efforts of the regulatory authorities, the optimization of payment services has been more concretely reflected. On February 23, the executive meeting deliberated and passed the "Opinions on Further Optimizing Payment Services and Improving Payment Convenience", emphasizing the need to focus on the inconvenience of payment for the elderly, foreign visitors to China and other groups, and promote the parallel development and complementarity of mobile payment, bank cards, cash and other payment methods.
In less than a week after that, the People's Bank of China held a meeting to promote the optimization of payment services, and proposed to pay close attention to key tasks such as bank card acceptance, foreign currency exchange, cash payment, mobile payment and publicity and promotion, and strive to achieve obvious results in the short term. Subsequently, the press office held a briefing on optimizing payment services, and once again proposed to increase the single transaction limit of mobile payment for foreign visitors to China from US$1,000 to US$5,000, and the annual cumulative transaction limit from US$10,000 to US$50,000.
After the relevant policies were released, commercial banks, non-bank payment institutions, clearing institutions, foreign currency exchange institutions and other market entities responded one after another. Alipay pointed out that on the day of the meeting (March 1), part of the quota increase requirements were completed, and all of them will be completed in the near future. In the next step, with the support and guidance of the People's Bank of China and the State Administration of Foreign Exchange, Alipay will solidly promote the implementation of various measures and continue to improve the payment security and convenience of overseas users in China.
In terms of WeChat Pay, it said that in addition to opening up scenarios and expanding merchant and customer service capabilities, it will continue to improve the payment experience of WeChat Pay foreign cards by simplifying the registration process, binding card payment and recharge payment. Under the guidance of the People's Bank of China (PBoC) and the State Administration of Foreign Exchange, Tenpay will continue to improve the cross-border payment experience based on its fintech capabilities and facilitate overseas people to work and live in China.
The next steps of the relevant surveyed payment service providers all point to the continuous improvement of the payment environment for foreign nationals and the optimization of payment services. Wang Pengbo, a senior analyst in the financial industry at Broadcom Analysis, believes that as one of the important infrastructures of the financial industry, the potential social value and role of payment are also being valued at a higher level. The importance of the payment industry can no longer be considered from the business level alone, and it has become an important infrastructure and part of society while following the development of the mobile Internet.
What expats are missing is the 'right for themselves' mobile payment model, mainly because this group does not understand the domestic payment process and the corresponding payment scenarios. Su Xiaorui said. Therefore, Su Xiaorui suggested that on the one hand, the development of payment convenience improvement should be gradually refined from the top-level system, and on the other hand, it is also necessary to take the existing payment business as a typical case, increase publicity and serve as a benchmark for serving designated customer groups.
In addition, Zhang Qingsong also emphasized at the meeting that in addition to a series of facilitation measures launched by payment institutions, the People's Bank of China has always insisted on paying equal attention to development and security, and paid attention to risk prevention and control in the process of promoting the improvement of payment services and market development, so as to achieve a dynamic balance between the two. On the one hand, it supports payment institutions, especially leading payment institutions, to implement differentiated risk prevention and control strategies for different transactions according to their own business realities; On the other hand, payment institutions are urged to strengthen transaction monitoring and risk assessment, and take targeted risk control measures based on the assessment results.
Beijing Business Daily reporter Liao Meng Dong Hanxuan.