Payment in China: similarities and differences compared to Europe


Blog by Paul Alfing (photo), Chair of Ecommerce Europe’s e-Payments Working Committee

I recently flew to the other side of the world and came to the conclusion that a single payments landscape is much closer than that we anticipate it to be over here in Europe. I was invited to speak at the Payment China 2015 Summit, which took place in Shanghai on May 21 and 22, and elaborated on the European payments landscape on behalf of Ecommerce Europe. During these two days, I learned a lot about online China and I returned home with the conviction that there are more than enough opportunities in China. The energy I felt over there will lead to many innovations, which will also benefit European online shops.

What Chinese banks recommend to retailers

Through an interpreter, I listened to multiple presentations on opportunities, innovations and mobile. I also saw some nice examples of the latest payment developments in China by Tenpay, Baidu Wallet and YeePay, among others. The banking sector especially emphasized that providers should place consumers more at the center of their attention and think more from their perspectives. For example, next to 24/7 online service, an appealing website is also a must. If banks do not seize their opportunities, they are afraid that they will lose consumers to new entrants.

In my opinion, they hit the nail on the head there as we also see new opportunities for banks with Access to the Account in Europe. In China, banks see and seize opportunities by starting their own online shop, for example, which is an effective way of retaining and/or serving customers. After all, the survival of banks is not only about lots of traffic but even more about services and emotional bonding.

Future of Chinese payment services

At the same time, it is interesting to note that Alipay, China’s largest payment solution, is in fact an “outdated” escrow payment method (payment through a third party). However, that does seem to be the foundation for online success, as it provides customers with a lot of trust, which turned out to be crucial for the growth of the Chinese online market. Naturally, the fact that the government did not anticipate this growth and consequently did not make it subject to regulations, also contributed. YeePay’s CEO explained the Internet’s success in China as follows: “The development of the Internet is similar to the development of China itself. China is a gentleman by tolerating differences and radiating harmony. This decentralization can be found in both the Internet and society, and makes the Internet part of the Chinese culture.” Big words, but the fact remains that new providers have broken the monopoly of old payment institutions. The next challenge is to connect both offline and online in a single payment platform. Just like us in Europe, China strives for an interoperable platform so that consumers can use their favorite payment method where and whenever they want.

A global (payment) market?

As a result, many parallels can be drawn between the Chinese and European payment market. A lot of the issues and challenges that I encountered during the congress are the same as in Europe, such as authentication, real-time payments, services, importance of security and identification. Both worlds will continue to grow and learn from each other. The common denominator remains that the provider who offers the best convenience and service to consumers will gain more market share. And given the fact that consumers give increasingly less about where a product comes from, we will indeed grow towards a single digital market. How this single market relates to the consumers’ emotional bonding with certain providers remains to be seen for now. However, GSMA offers a good example of concrete globalization with the development of its global solution for mobile identification.


In addition, if we can make sure that interoperability becomes the standard and we do not have to speak of e-, m- or any other specific kind of commerce anymore, a market that will make the European Commission’s Digital Single Market look like child’s play arises.

By doing this, we will not give free way to the big red scare. Sure, online shops that refuse to adapt will face hard times, but this will also be the case with closed borders. On the other side, it offers a lot of opportunities, as there are heaps of Chinese consumers who are interested in European products. In addition, lots of Chinese parties are eager to assist European entrepreneurs to enter the Chinese market. Perhaps because some of them have grown tired of Alibaba’s arrogance…