Previously, I wrote a couple of articles on Alipay and WeChat Pay, their history and strategy, their
progress on the Russian ground. Not only them, Alibaba and Tencent, overall. Since then, things were constantly moving forward.
FT Confidential Research, 2018
First of all, WeChat Pay continued skyrocketing, obviously getting to Alipay popularity level, or even exceeding it. WeChat disclosed whooping 800
million monthly active users of its payment service, out of 1 billion overall, meanwhile, Alipay has just recently updated its number of MAU to 700
million people. However, it enjoys more online acceptance compared to WeChat Pay. And the reason might be the fact that online space is dominated by Alibaba websites that showcase Alipay exclusively.
Second, Chinese tourism is referred to as China’s soft power now. And it is used as a part of WeChat Pay overseas development strategy. At least, this is what Tencent, owner of WeChat Pay, said in its presentation on the Money2020 China
conference just this week.
Thanks to FIFA World Cup the Chinese payment system volume has increased 50-fold in Russia, shocking
the country. In Russia, just as in other countries around the world, Chinese are the most precious and the leading type of tourists. Last year we recieved 1,5 million visitors from China, the number that is quite unusual and significant for
Alipay was the primary explorer to the Russian market, thanks to its local management efforts that got it to integrate directly with the acquiring banks. Whatever that means in time- and money-consuming sense. WeChat Pay, however, never hired a manager for
the Russian market, or opened a representative office here (disregarding the misleading information from some market players), or regarded Russian market as a priority.
Time goes by, and this 2018 year Russia has been sitting on the edge of the tongue for the WeChat Pay team. And now it is available for the local
businesses to connect to through local companies…
WeChat strategy towards foreign users and markets is as follows:
a) full WeChat Pay edition for other markets, compliant and licensed is accordance with other country’s rules. There are already WeChat Hong Kong and WeChat Malaysia,
b) partnership with local payment companies to integrate WeChat Pay into local retail, duty free shops and other places frequented by the Chinese tourist,
c) ability for foreigners with prolong stay in China to bind their Visa, MasterCard, Amex, Diners cards to the wallet. However, those should be issued by the Chinese banks to work properly.
What WeChat Pay does in Russia is not their entry to the market as a new e-wallet for Russians. Russians won’t be able to use it whatsoever. This is solely to support Chinese tourists and businessmen comfort visiting our country. You know,
because this is what they are using to pay for stuff back in China, where no cash or cards are used anymore.
If WeChat Pay decides to become local for Russians, they will have to set up an entity and get a payment (actually banking) license from the Central Bank of Russia. Or get a very close type of relationship with a local payment company.
Partnerships with local banks, payment providers, retailers are the core of the most work being done by both Chinese e-wallets in most countries worldwide.
Thus, WeChat Pay is finally there to teach Russian local business how to deal with their Chinese customer, how to advertise properly, how to leverage the mini-apps, engage with influencers, and overall, how to promote the country’s image. To make it a valuable
case for a non-group destination.
WeChat Pay is not just a payment service. It is a key to merchant business promotion on the largest Chinese social network, and messenger, and the promotion network for brands, products and services.
I hope there will be very few local merchants that need further explanation.
Anna Kuzmina is the deputy Chief Commercial Officer at Yandex.Money, one of the leading fintech companies of Russian origin, operating both b2c and b2b financial
services. Follow Anna on Youtube, Twitter, Medium, Telegram или Яндекс.Дзене.