Go Back  FlyerTalk Forums > Destinations > Asia > China
Reload this Page >

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?

Reply

Old Apr 14, 19, 8:03 pm
  #1  
Original Poster
 
Join Date: Jul 2008
Location: YYC
Programs: UA 1K
Posts: 438
For how much longer will foreigners be second class technological citizens in China?

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?
percysmith likes this.
david_oz is offline  
Reply With Quote
Old Apr 14, 19, 8:14 pm
  #2  
889
 
Join Date: Oct 2014
Posts: 1,542
To add to the list, you can't pick up or buy a train ticket from a self-service machine without a Chinese ID card: you have to wait, often for quite a long time, at the ticket window.
889 is online now  
Reply With Quote
Old Apr 14, 19, 9:47 pm
  #3  
 
Join Date: Dec 2007
Location: PEK and BOS
Programs: BA - Blue
Posts: 3,589
The problem is that China's tourist industry is 95%+ geared towards the domestic market. If one goes up the Eiffel Tower: 80%+ of the tourists will not be from France. If one goes to the Great Wall: 95% of the tourists will be from the mainland. So although the government makes a lot of propoganda noise about TWOV, foreign language signage (both of which are excellent), non-government initiatives, that really go after the bottom line, just don't care about the drop in the ocean which is the adventurous, independent foreign traveller (who would be ones to use Didi/ vending machines etc). The subway is a new one: I can't imagine that cash isn't acceptable at the subway, but I have never been to Xi'an.

tb
trueblu is offline  
Reply With Quote
Old Apr 14, 19, 10:20 pm
  #4  
 
Join Date: Aug 2009
Location: ZOA, SFO, HKG
Programs: UA 1K 0.8MM, Marriott PLT, HHonors Gold, Hertz PC, SBux Gold, TSA Pre✓
Posts: 9,630
Originally Posted by david_oz View Post
How much longer before somebody (government, or private company) decides they want to solve them?
Long story short - contrary to what you believe, the Government (i.e. People’s Bank of China) actually does not want these payment processors to expand as quickly as now.

So bottom line - you want to see tourists to be benefited? Not in foreseeable future.

If you know more about China, you will know why this is the case.
drewguy likes this.
garykung is offline  
Reply With Quote
Old Apr 15, 19, 2:15 am
  #5  
 
Join Date: Feb 2003
Posts: 4,354
Originally Posted by garykung View Post
Long story short - contrary to what you believe, the Government (i.e. People’s Bank of China) actually does not want these payment processors to expand as quickly as now.

So bottom line - you want to see tourists to be benefited? Not in foreseeable future.

If you know more about China, you will know why this is the case.
Why would they not want them to expand? They are now able to track everyone's spending and tie it to a bank account which makes it much easier to find people who are washing money or under declaring on taxes. I'm sure the People's Bank would love for 100% electronic transactions.

Whether they would care if foreigners could access these features or not is another matter. I can't even use my Union Pay card to withdraw cash in Macau now as one needs to put their Chinese ID card on the ATM machine in order for it to be read before the cash is dispensed. I'm sure Macau won't be the last place where this feature is installed on ATM machines that accept Union Pay. I also can't use WeChat Pay or Alipay outside of the mainland because I don't have a Chinese ID card; I assume this is to stop those Chinese with other citizenship from getting out of dodge with alot of money but its an inconvenience for expats like myself.

The government is trying harder to limit the outflow of cash and track everyone's daily life, including their spending. Foreigners are a very low priority here, which kinda makes sense when you've first got to worry about 1.4 billion of your own citizens!
travelinmanS is offline  
Reply With Quote
Old Apr 15, 19, 5:27 am
  #6  
889
 
Join Date: Oct 2014
Posts: 1,542
The Chinese government likes to plan, regulate and control everything.

But the Wechat/Alipay payment systems caught the government completely off-guard, especially the way they spread so rapidly, and in the last couple of years the government has been playing catch-up, with various new rules trying to regulate the industry, like real-name verification.

The government would have much preferred that state-controlled Unionpay have a lock on the payment system, but Unionpay was too slow off the block and got caught out by Wechat/Alipay.
drewguy likes this.
889 is online now  
Reply With Quote
Old Apr 15, 19, 5:52 am
  #7  
FlyerTalk Evangelist
 
Join Date: Dec 2000
Location: Shanghai
Posts: 28,742
Originally Posted by david_oz View Post
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.
While I agree that some the technological barriers seem senseless, in part because they are somewhat newly created, I think the more important point is that the 0.001% of the market the we foreigners comprise hardly warrants an onze of attention in most cases.
moondog is online now  
Reply With Quote
Old Apr 15, 19, 12:00 pm
  #8  
Original Poster
 
Join Date: Jul 2008
Location: YYC
Programs: UA 1K
Posts: 438
For sure, I understand the government there wants to both control and verify capital outflows, but it could still be quite easy to achieve these aims. Alipay / wechat could just setup an online passport verification system where you need a passport and chinese visa to register, accept transfers of cash through paypal or some other payment network which foreigners have access to, and just make it one way ie. cash can be moved into an account, but not out of it, or can only be withdrawn into RMB cash through a partner bank. Or alternatively setup a weekly limit on withdrawals back to paypal to some amount which complies with their capital controls.

I understand the argument that wechat and alipay don't care about foreigners when it is a very small percentage of the market, but they still have a chance to pickup quite a lot of incremental revenue for very little cost if they can execute it. Politics not withstanding, inbound tourism into China will probably grow over time. They also have a chance to expose foreigners to the convenience they offer, and take on visa/mastercard in foreign markets. In my last couple of visits to Sydney I've seen alipay and wechat signs everywhere... I bet there is a market in western countries for these services, especially for people who are averse to credit cards
david_oz is offline  
Reply With Quote
Old Apr 15, 19, 1:58 pm
  #9  
 
Join Date: Aug 2009
Location: ZOA, SFO, HKG
Programs: UA 1K 0.8MM, Marriott PLT, HHonors Gold, Hertz PC, SBux Gold, TSA Pre✓
Posts: 9,630
The success of these processors are actually a direct result of the PBC's failure.

One of the reasons is there are simply too many counterfeit CNY booknotes. Using payment processors can avoid counterfeiting issue. Also - the largest denomination of CNY is still $100. Carrying a large stack of banknotes is inconvenient comparing using processors.

Originally Posted by 889 View Post
The Chinese government likes to plan, regulate and control everything.
To supplement - everything means absolute 100%, not 99.99%.

Originally Posted by 889 View Post
The government would have much preferred that state-controlled Unionpay have a lock on the payment system, but Unionpay was too slow off the block and got caught out by Wechat/Alipay.
To supplement, many key Chinese enterprises are state-owned. Alibaba (which owns Alipay) and Tencent (which owns WeChat Pay) are not state-owned.

Originally Posted by david_oz View Post
For sure, I understand the government there wants to both control and verify capital outflows, but it could still be quite easy to achieve these aims. Alipay / wechat could just setup an online passport verification system where you need a passport and chinese visa to register, accept transfers of cash through paypal or some other payment network which foreigners have access to, and just make it one way ie. cash can be moved into an account, but not out of it, or can only be withdrawn into RMB cash through a partner bank. Or alternatively setup a weekly limit on withdrawals back to paypal to some amount which complies with their capital controls.
Then how can you assure that the person using the account is indeed the account holder?

There is a reason why these accounts are linked with Chinese mobile phone numbers.

Originally Posted by david_oz View Post
In my last couple of visits to Sydney I've seen alipay and wechat signs everywhere... I bet there is a market in western countries for these services, especially for people who are averse to credit cards
They are available for the sake of earning CNY from Chinese, but not you.
garykung is offline  
Reply With Quote
Old Apr 15, 19, 2:39 pm
  #10  
889
 
Join Date: Oct 2014
Posts: 1,542
"I understand the argument that wechat and alipay don't care about foreigners when it is a very small percentage of the market, but they still have a chance to pickup quite a lot of incremental revenue for very little cost if they can execute it."

It's the central government which has dictated the use of domestic bank accounts for name verification (with a possible exception, I'm not sure, for Hong Kong people). Point is, Alipay and Wechat aren't free to set up an alternative passport channel without government OK.
889 is online now  
Reply With Quote
Old Apr 15, 19, 6:00 pm
  #11  
 
Join Date: Feb 2003
Posts: 4,354
Originally Posted by 889 View Post
"I understand the argument that wechat and alipay don't care about foreigners when it is a very small percentage of the market, but they still have a chance to pickup quite a lot of incremental revenue for very little cost if they can execute it."

It's the central government which has dictated the use of domestic bank accounts for name verification (with a possible exception, I'm not sure, for Hong Kong people). Point is, Alipay and Wechat aren't free to set up an alternative passport channel without government OK.
That’s the thing, Ali and Tencent may be “private” companies but they are certainly government controlled, especially when it comes to their payment systems. It’s a great way for the government to track spending.
travelinmanS is offline  
Reply With Quote
Old Apr 15, 19, 6:05 pm
  #12  
889
 
Join Date: Oct 2014
Posts: 1,542
Rather like the way Google tracks phones for US law enforcement.
889 is online now  
Reply With Quote
Old Apr 15, 19, 6:15 pm
  #13  
 
Join Date: Feb 2003
Posts: 4,354
Originally Posted by 889 View Post
Rather like the way Google tracks phones for US law enforcement.
Or how Facebook/Insta allow the government to track numerous activities. Privacy around the world is dead thanks to tech. The Chinese tech companies just seem to be producing the best technology these days, certainly when it comes to one application integrating everything you “need”; we chat has no peers anywhere in the world.
travelinmanS is offline  
Reply With Quote
Old Apr 15, 19, 10:52 pm
  #14  
 
Join Date: Aug 2009
Location: ZOA, SFO, HKG
Programs: UA 1K 0.8MM, Marriott PLT, HHonors Gold, Hertz PC, SBux Gold, TSA Pre✓
Posts: 9,630
Originally Posted by 889 View Post
It's the central government which has dictated the use of domestic bank accounts for name verification (with a possible exception, I'm not sure, for Hong Kong people).
I can speak on this behalf.

We are still subject to the name verification, because we have Chinese issued travel document (and that's the document needed for many things in China). The only exception is we are allowed not to have a Chinese address and phone number.

Originally Posted by 889 View Post
Point is, Alipay and Wechat aren't free to set up an alternative passport channel without government OK.
Exactly.

Originally Posted by travelinmanS View Post
The Chinese tech companies just seem to be producing the best technology these days, certainly when it comes to one application integrating everything you “need”; we chat has no peers anywhere in the world.
The technology is not something new. And again -- the success of these processors are the direct result of the failure of the PBC.

Just because Alipay and Wechat Pay are successfuly in China, it does not automatically mean it will be a success somewhere else. For example, the most popular payment method in Hong Kong is still Octopus.
garykung is offline  
Reply With Quote
Old Apr 15, 19, 11:18 pm
  #15  
FlyerTalk Evangelist
 
Join Date: Dec 2000
Location: Shanghai
Posts: 28,742
Wechat and Alipay are both superior to Octupus in every conceivable way.
moondog is online now  
Reply With Quote

Thread Tools
Search this Thread