China is ever more a breeding ground for Mobile Payment solutions. Competition is fierce: in addition to the two historic leaders vying for dominance, Alibaba with Alipay mobile and Tencent group messaging giant with Wechat Pay, 2016 saw the entry of international players Apple Pay and Samsung Pay that rely on NFC payments.
Will the International players be able to put a dent in Chinese leadership?
For now, competition appears to be mostly local, as the recent hongbao – the traditional exchange of money or best wishes between relatives and friends on the Chinese new year (January 28 2017) – seems to indicate, in which Wechat and Alipay played a lead role. In fact, since 2014 it is possible to purchase a virtual hongbao, and this year Alipay launched a game similar to Pokémon Go, forbidden in China, that through augmented reality adds the possibility of hiding the red envelopes in real locations and to physically seek them out. Wechat announced it has managed 14.2 billion digital hongbao this new year’s, reaching a peak of 760,000 transactions per second at midnight, and registering a 75.7% increase from last year. In a Country where paying with your smartphone and exchanging money through Mobile Apps has become the norm, augmented reality can help to make the payment phase more fun.
The challenge between Alipay and Wechat is extending beyond national borders: Alipay is establishing important agreements with international payment players to enable the many Chinese travellers to pay with their application also in Europe and North America. When can we expect to see them in Italy with a payment service proposal for Italian users?
by Valeria Portale and Ilaria Faiella, Mobile Payment & Commerce Observatory