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For how much longer will foreigners be second class technological citizens in China?

For how much longer will foreigners be second class technological citizens in China?

Old Apr 16, 2019, 8:14 am
  #31  
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"This thread has prompted me to think about how/why Wechat and Alipay managed to achieve dominant positions wrt payment."

I think it comes down to money. Using those systems, a merchant pays a tiny fraction of one percent to get payments into his bank account. Using Chinese bank cards, the fees run well over one percent, and there's the need for a special terminal and phone line. With Wechat and Alipay, a small merchant can just use his phone. That is, Wechat and Alipay have spread so quickly because the transaction and entry costs are practically nil.

Compare this with the fees of Visa/MC in the West. They have a lock on electronic payments in many countries, and aren't about to expand their business by cutting their very lucrative fees to Alipay/Wechat levels.
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Old Apr 16, 2019, 8:39 am
  #32  
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One issue that I enjoy is these small merchants at the market or selling street food are no longer required to handle money and make your food or cut your meat.
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Old Apr 16, 2019, 8:53 am
  #33  
 
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Originally Posted by 889
Compare this with the fees of Visa/MC in the West. They have a lock on electronic payments in many countries, and aren't about to expand their business by cutting their very lucrative fees to Alipay/Wechat levels.
I think this is the main ingredient that has allowed Alipay/Wechat to take the dominant position. China doesn't have an entrenched credit card culture with a vast system of payment providers all skimming off the top of transactions along with the credit card companies. So the electronic payment system was ripe for taking over and it happened pretty fast. Just 4 years ago when I started coming to China, WeChat pay was not as ubiquitous as it is now. In Shenzhen only the past 2 years has paying taxis with WeChat become the norm. Now it's pretty much expected to pay everywhere, which is frustrating for the foreigners that can't access WeChat/Ali pay.

I just don't see this happening in the US any time soon as the credit card companies and merchant providers have the system all locked down to collect their fees and theres not a company who can gain dominance enough to take over electronic payment. Maybe Apple Pay but it's acceptance is certainly not happening fast, even with the millennials. If any company had a chance it might have been PayPal, the youngins are using Venmo a lot but I still can't pay for my lunch in NYC with Venmo.
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Old Apr 17, 2019, 4:04 pm
  #34  
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Originally Posted by 889
Compare this with the fees of Visa/MC in the West. They have a lock on electronic payments in many countries, and aren't about to expand their business by cutting their very lucrative fees to Alipay/Wechat levels.
Visa/Mastercard's interchange is already capped at very low levels in many countries, especially in the EU (0.2-0.3%). In fact, I feel like businesses in the US are less happy about accepting cards partly as a result of a relative lack of said caps; I suspect the US would still be a predominantly cash society without the previous decades of conditioning the public to use them.

Originally Posted by synthkeys
I just don't see this happening in the US any time soon as the credit card companies and merchant providers have the system all locked down to collect their fees and theres not a company who can gain dominance enough to take over electronic payment. Maybe Apple Pay but it's acceptance is certainly not happening fast, even with the millennials. If any company had a chance it might have been PayPal, the youngins are using Venmo a lot but I still can't pay for my lunch in NYC with Venmo.
Apple Pay and other NFC based mobile wallets still rely on Visa and Mastercard. If businesses are already fairly unhappy about accepting cards (to the point where some, like Kroger, are killing off acceptance at some of their locations), they're going to be hesitant to enable methods that make card use easier. I'm honestly surprised acceptance is as high as it is.

Additionally, stuff like Venmo is still going to require POS software updates on the retailer side since they aren't going to buy a separate device or rely on employees' own mobile devices to accept QR payments. Plus, it doesn't seem any less expensive than just accepting cards directly (nor does Venmo allow in-person businesses at the time of this writing, which is probably the biggest factor).
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Old Apr 18, 2019, 3:12 am
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Regarding the original question "For how much longer will foreigners be second class technological citizens in China?" - if you are just a tourist, no point bothering with the technology. If you live there or are a regular traveler then you should have a local SIM and a Chinese bank account so you can do most of it.
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Old Apr 18, 2019, 5:02 am
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Originally Posted by JPDM
Regarding the original question "For how much longer will foreigners be second class technological citizens in China?" - if you are just a tourist, no point bothering with the technology. If you live there or are a regular traveler then you should have a local SIM and a Chinese bank account so you can do most of it.
I agree that this is the case -- for now. It's conceivable that some vendors just won't accept cash in the not too distant future. Especially since the modes of payment accepted are very difficult for foreign tourists to access, this will be a problem for the foreign tourist who wants to go off the beaten path (I would expect the overpriced water sellers on the GW to still accept cash!).

tb
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Old Apr 18, 2019, 7:09 am
  #37  
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Note to students: this is the single best China related thesis topic I've seen during the past 25 years (my thesis was focused on illegal telco JVs, not so interesting). Basically, you can split the argument into 3 parts: 1. technology, 2. user base, 3. government ties.
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Old Apr 18, 2019, 11:24 am
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Originally Posted by david_oz
I just came back from a trip to Xi’an. This was my 3rd trip to China in the last three years, and it is clear that China is / has been a first mover in several areas. Unfortunately, foreigners (and I’m referring to tourists, not foreigners who live in China) seem almost 100% shut out of some of the most useful innovations. Examples from my trip include:

Cashless payments - wechat and Alipay are unavailable unless you have a Chinese bank account. In some cases this is just a minor inconvenience having to pay with cash, and other times it means you actually can’t buy whatever it is (eg. from a vending machine) that only accepts wechat and Alipay. One particularly perverse example I faced was that the machine to buy a stored value metro card only accepted Alipay and wechat, and they didn’t sell the card at the station counter. A helpful article I read referred me to a local bank which also sells the cards.... but they also only accept cashless payments.

Didi - on a previous trip to China this worked great for me. But now after getting a new credit card I was unable to add the new credit card number (or any credit card number) to didi. After trying to delete and reinstall the app I discovered that the app is no longer even available in foreign iTunes stores, so it is now completely unavailable to me.

Bike sharing - mobike requires you to register your passport to rent a bike, and the verification wasn’t completed for me by the time I left 2 days later. Also their app only took wechat and Alipay. I gave up with ofo after the texting code didn’t reach me within the 1 min time limit because my phone was roaming.

These seem like really easy problems to solve which would greatly enhance people’s experiences in China, and their perception of China. How much longer before somebody (government, or private company) decides they want to solve them?
Comes down to where the control and business is, tourist are simply trump change and also not the focus for either.
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Old Apr 20, 2019, 10:29 am
  #39  
 
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Lived in China for 6-7 years now and would agree with several of the previous posters in response to the OP. In essence, the "foreign market" (i.e. tourists + foreigners living in China) is just so much smaller than the main Chinese market, so any accessibility for the "FM" is likely to be tacked on rather than fully integrated into the system. I can't see much of these issues being resolved for tourists, although the government could help those working in China by providing an ID card which would work as verification ID like a citizen's ID card.

To add/supplement some points:
- Both Alipay and WeChat wallets work mainly by having users link their bank account(s) to the service. There are two other methods. One is to get someone to add you to WeChat and then transfer money to you. You could also (at least a few years ago) buy credit at post offices (think something akin to an iTunes card) which you can then add to your account.
- I might be a little sheltered up in the northeast, but I've never had any clerk kick up a stink, let alone refuse, paper money as a means of payment. Faster most of the time too compared to waiting for some idiot to find the right section of the app to pay for something.
- Picking up train tickets has become much easier since the automatic ticket machines came in for ID card holders. The main group of Chinese people who still queue up the old skool way are people who don't have or can't use a computer.
- One issue with using WeChat wallet/Alipay overseas is that I can't! I suspect this is due to currency controls. The main issue with this in the past was that foreigners can only buy US$500 (or equivalent) using RMB per day. It would be nice if they at least applied this in some way to WeChat/Alipay rather than blocking my attempted purchase of an iced coffee in Singapore.
-Particularly agree with 889 about the difference for sellers with WeChat/Alipay compared to Visa/MC in the west. In Australia, the banks and MC/Visa run the rort manage the system to their own benefit. High fees and setup costs are the norm, especially for smaller retailers who don't have the market power to fight back. In China, a guy selling roasted sweet potatoes on the street corner just needs a WeChat account (like nearly everyone else in China) and maybe Ą2 for printing out a QR code and maybe splashing out on laminating it. Transaction fees are also far lower than in the west. Electronic payments are more widespread in China because it essentially costs nothing for both sides of the transaction.
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Old Apr 20, 2019, 11:55 am
  #40  
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"One is to get someone to add you to WeChat and then transfer money to you."

No. As said many times in this thread, you are not going to get QR payments working on Wechat today without a Chinese bank account (with a possibe exception for HK people, I don't know).
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Old Apr 20, 2019, 2:59 pm
  #41  
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Getting a bank account is a critical path step. While it's true that other people can juice your Wechat/Alipay accounts, it's obviously much better to control your own destiny.

Last fall, an FTer on an M visa reached out to me for banking advice, and struck out everywhere (i.e. all of the banks wanted RPs). I use ICBC myself because they have a strong presence in Shanghai, but CMB and Huaxia are much friendlier banks. I believe we have a dedicated thread on banks. If not, I will create one.
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Old Apr 20, 2019, 3:47 pm
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The bank account thing seems to be a hit and miss. A few recent accounts (another forum) of people opening and account on first try. Seems to be a random situation.
Soon added to the list of differences between locals and foreigners will be train tickets. Already in place in a few places, there will be no more physical train tickets by the end of the year, except for us.
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Old Apr 20, 2019, 3:48 pm
  #43  
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Originally Posted by 889
​​​​​​...
with a possibe exception for HK people, I don't know).
Some Chinese bank branches will open a wechat/ali enabled acct for people with HKID and HPR in SZ. But it is an YMMV situation.

BoC has just offered since mid April HK based WeChat and Ali enabled RMB account for HKPR with HRP. Just had mine confirmed and it is working for WeChat and Ali payments.
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Old Apr 20, 2019, 4:30 pm
  #44  
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"While it's true that other people can juice your Wechat/Alipay accounts, it's obviously much better to control your own destiny."

Can we once and for all put to rest this notion of sending people off to get a red packet to open up Wechat Pay without a Chinese bank account?

Here, from the horse's mouth, is what Wechat says:

"According to regulations of the People's Republic of China, including the Administrative Measures for the Payment Services Provided by Non-financial Institutions, the Administrative Measures for Anti-Money Laundering and Combating the Financing of Terrorism for Payment Institutions, and the Administrative Measures for the Web Payment Services Provided by Non-bank Institutions that came into effect on July 1, 2016, real-name authentication is required to for users of WeChat Wallet (RMB) to ensure payment security and protect the legitimate rights and interests all payment users so that they can enjoy more comprehensive and secure payment services.Therefore, after receving a red packet, the authentication must be completed by adding a debit card opened in Mainland China within 24 hours. If the real-name authentication has not been completed, the red packet will be returned."

https://kf.qq.com/touch/wxappfaq/161...2022ERZzm.html
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Old Apr 20, 2019, 4:44 pm
  #45  
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Originally Posted by 889
"While it's true that other people can juice your Wechat/Alipay accounts, it's obviously much better to control your own destiny."

Can we once and for all put to rest this notion of sending people off to get a red packet to open up Wechat Pay without a Chinese bank account?

Here, from the horse's mouth, is what Wechat says:

"According to regulations of the People's Republic of China, including the Administrative Measures for the Payment Services Provided by Non-financial Institutions, the Administrative Measures for Anti-Money Laundering and Combating the Financing of Terrorism for Payment Institutions, and the Administrative Measures for the Web Payment Services Provided by Non-bank Institutions that came into effect on July 1, 2016, real-name authentication is required to for users of WeChat Wallet (RMB) to ensure payment security and protect the legitimate rights and interests all payment users so that they can enjoy more comprehensive and secure payment services.Therefore, after receving a red packet, the authentication must be completed by adding a debit card opened in Mainland China within 24 hours. If the real-name authentication has not been completed, the red packet will be returned."

https://kf.qq.com/touch/wxappfaq/161...2022ERZzm.html
Which bank for American Citizen?

Let's focus on helping newcomers get bank accounts.
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