2 PAYMENT METHOD PROFILES: DIGITAL WALLETS
visitors to use Alipay for a variety of services including transportation, dining, lodging, food purchases, etc. up to $2,000 without registering their ID. 328 Alipay claims to be accepted by 90 million+ merchants in 70+ markets around the world. 329 Furthermore, Alipay+ is integrated with 36 different mobile payment providers (e.g. DANA, GrabPay, Line Pay, etc.) facilitating cross-border payments and enabling local shopping experiences for those wallet users traveling abroad. 330 Alipay’s parent company Ant Group is affiliated with Alibaba Group Holding whose share of Chinese domestic ecommerce sales stand at approximately 46%. 331 Alipay charges merchants a fee of approximately 0.55%. 332 In 2011 parent company Tencent launched Weixin and WeChat social media apps. 333 WeChat Pay – also known as Weixin Pay in mainland China – was launched shortly thereafter by Weixen and Tenpay in 2013 and is currently available in more than 74 geographies and support transactions in 31 currencies. 334 WeChat Pay is China’s second most popular digital payment method with more than one billion daily average commercial payments on Weixin Pay facilitating an array of financial activities, including retail purchases, bill payment, and peer-to-peer payments. 335 WeChat Pay merchant fees are calculated on a percentage basis dependent on industry transaction size and other factors. 336 WeChat Pay employs multifactor authentication via passwords, text message verification, and biometrics while also utilizing encryption and tokenization along with near real-time communication between WeChat Pay and the customer’s bank to assess funds availability and fraud risk. 337 Much like Alipay, WeChat Pay began accepting foreign credit cards on their platform in 2023 after some trials initiated as early as 2019. 338 WeChat supports QR-based payments (via desktop or POS scan), through a mobile browser WeChat Pay app button, in app, via merchant account social sites, and a customized merchant mini program within the WeChat/Weixin social media app. 339 Also, like Alipay, WeChat is available in several other global geographies across Asia-Pacific, North America and Europe. 340 Both Alipay and WeChat Pay’s moves to enable international payment cards within their digital wallets occurred in parallel with the release of plans by the China State Council and the National Development and Reform Commission (NDRC) aimed at improving mobile payment solutions for inbound tourists at major international events, such as the 2022 Beijing Olympic Winter Games. 341 The Chinese government has played a crucial role in shaping the digital payment landscape. In 2015, the People’s Bank of China and several other federal government departments issued guidance on promoting the healthy development of internet finance, 342 paving the way for continued innovation in digital wallets and internet payments. More recently, the Chinese government has launched one of the largest central bank digital currency pilots globally with the digital yuan or e-CNY aiming to centralize payment systems dominated by Alibaba and Tencent. By June 2024, e-CNY transaction volume reached 7 trillion e-CNY or $986 billion USD across 17 provincial regions. 343 The integration of e-CNY into e-wallets has the potential to drive further adoption and innovation in the digital payment space in the next frontier of China payments.
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