A customer using the Alipay payment service at the German department store Breuninger in Dusseldorf, Germany on June 29, 2018. Photo: Xinhua
A customer using the Alipay payment service at the German department store Breuninger in Dusseldorf, Germany on June 29, 2018. Photo: Xinhua

Alipay launches international e-wallet, giving foreigners access to mobile payment platform in first for China

  • Ant Financial unveils a 90-day ‘tour pass’ programme for short-term visitors to pay for online purchases through its Alipay platform
  • China received 30.5m international tourists in 2018 who spent US$73.1 billion from lodging to shopping and food, Ant Financial says
Topic |   China technology

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A customer using the Alipay payment service at the German department store Breuninger in Dusseldorf, Germany on June 29, 2018. Photo: Xinhua
A customer using the Alipay payment service at the German department store Breuninger in Dusseldorf, Germany on June 29, 2018. Photo: Xinhua

Without a Chinese bank account and a local mobile phone line, foreigners have found it difficult, if not impossible, to find any smartphone app to pay for online purchases in China. That hurdle will be now removed under a pioneering effort by Alipay.

Ant Financial Services Group, which operates one of China’s two dominant e-payment platforms, will give foreign visitors to the mainland access to its mobile payment platform from Tuesday, according to a statement. It will allow visitors up to 90 days’ usage of its smartphone application without requiring a local bank account or mobile phone number, it added.

Ant Financial is an associate of Alibaba Group Holding, which in turn is the owner of The South China Morning Post.

Under the programme called ‘Tour Pass’, the company will introduce an international version of its Alipay app for download and registration using their international phone numbers.

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The app will enable visitors to pay for their transactions using a 90-day prepaid card from the Bank of Shanghai.

The move will open the door for Ant Financial to extend its dominance in the home market and tap into growing tourism in the world’s second-largest economy. China received 30.5 million of foreign visitors in 2018, an increase of 4.7 per cent from the previous year. They spent about US$73.1 billion in lodging, food, shopping, among others, Ant Financial estimates.

Ant Financial Services, operator of Alipay and an affiliate of Chinese e-commerce giant Alibaba Group Holding, will give foreign visitors to the mainland access to its service in a first for China. Photo: Handout
Ant Financial Services, operator of Alipay and an affiliate of Chinese e-commerce giant Alibaba Group Holding, will give foreign visitors to the mainland access to its service in a first for China. Photo: Handout

The international version of the Alipay app is not being made available for Hong Kong and Macau mobile phone users, Ant Financial said. There is a mobile payment solution called Alipay HK for Hong Kong users, which is different from the mainland version.

To gain access to China’s mobile payment services, Hong Kong residents can open a Chinese bank account through Bank of China (Hong Kong), one of the city’s three currency issuers, without having to do so onshore.

Ant Financial said the 90-day prepaid card can be reloaded using their international debit or credit cards. The minimum top-up is 100 yuan, with the balance capped at 2,000 yuan. Users can top up “multiple times” and Alipay has set an undisclosed but “reasonable” ceiling, it said.

Alipay competes with Tencent Holdings’ WeChat Pay for dominance in China’s cashless economy. Both operators have more than 90 per cent penetration rate among internet users, according to a 2018 report on China’s third-party mobile payments market by research firm Ipsos. Alipay, together with its local e-wallet partners across Asia, serves more than 1.2 billion users on its platform, according to its statement.

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This article appeared in the South China Morning Post print edition as: alipay opens door for foreigners
Cashless payment platforms through smartphone-enabled QR codes are ubiquitous in China, expanding to a US$12.8 trillion market by the end of October in 2017. Ant Financial’s Alipay and Tencent’s WeChat Pay are the two dominant service providers. Here a seafood hawker in Beijing announces he accepts both payment methods. Photo: EPA
Cashless payment platforms through smartphone-enabled QR codes are ubiquitous in China, expanding to a US$12.8 trillion market by the end of October in 2017. Ant Financial’s Alipay and Tencent’s WeChat Pay are the two dominant service providers. Here a seafood hawker in Beijing announces he accepts both payment methods. Photo: EPA

China’s digital currency tsar says e-pay platforms could bypass banks to give tourists access to cashless payment services

  • Mu Changchun, the Chinese central bank’s foremost authority on digital currencies said the People’s Bank of China is ready to open its digital currency to visitors and rural residents without needing them to open bank accounts
  • The move comes as Alipay and WeChat Pay account for 96 per cent of the country’s mobile payment, as the duo become “systemic significant” infrastructure, he said
Topic |   Digital currencies

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Cashless payment platforms through smartphone-enabled QR codes are ubiquitous in China, expanding to a US$12.8 trillion market by the end of October in 2017. Ant Financial’s Alipay and Tencent’s WeChat Pay are the two dominant service providers. Here a seafood hawker in Beijing announces he accepts both payment methods. Photo: EPA
Cashless payment platforms through smartphone-enabled QR codes are ubiquitous in China, expanding to a US$12.8 trillion market by the end of October in 2017. Ant Financial’s Alipay and Tencent’s WeChat Pay are the two dominant service providers. Here a seafood hawker in Beijing announces he accepts both payment methods. Photo: EPA

China’s central bank, working on a plan to launch a digital version of the renminbi, said the virtual currency can be “decoupled” from the banking system to give visiting tourists a taste of the nation’s burgeoning cashless society.

The original construct of the proposed digital currency electronic payment (DCEP) system, which relies on licensed commercial banks to convert cash and coins in circulation into digital versions of the yuan, can be separated from the system for short-term visitors, said the director general at the Institute of Digital Currency at the People’s Bank of China. That would allow them to use the digital currency without first having to open a bank account with a Chinese bank, he said.

“The DCEP is loosely coupled with a traditional bank account,” said the central bank’s Mu Changchun, during the 2019 Hong Kong fintech Week conference. “Actually it could be decoupled from the traditional bank accounts. Thus, those who don’t have bank accounts in China can still open a digital wallet and enjoy mobile payment services in China.”

Mu’s comment offers a peek and the theoretical framework into the Chinese central bank’s plan to spearhead the development of fintech, leveraging on the
estimated US$12.8 trillion in electronic payments
recorded by the world’s second-largest economy in the first 10 months of 2017. Ant Financial Services, an associate of this newspaper’s owner Alibaba Group Holding and the dominant operator of China’s two e-payment platforms,
yesterday said it would offer foreign tourists up to 90 days’ usage
of its smartphone application without requiring a local bank account.
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Mu Changchun (centre) of the People’s Bank of China during a panel discussion at Fintech Week conference on how the central bank’s digital currency could shape the future of cross-border payments. The panel was chaired by the Hong Kong Monetary Authority’s senior executive director Edmond Lau. Photo: Handout
Mu Changchun (centre) of the People’s Bank of China during a panel discussion at Fintech Week conference on how the central bank’s digital currency could shape the future of cross-border payments. The panel was chaired by the Hong Kong Monetary Authority’s senior executive director Edmond Lau. Photo: Handout

Ant’s Alipay ‘Tour Pass’ still requires a prepaid card from the Bank of Shanghai as the agent for transactions of between 100 yuan and up to 2,000 yuan each. Mu’s comments implied that in future, accounts at commercial banks can be completely cut out.

China received 30.5 million of foreign visitors in 2018, an increase of 4.7 per cent from the previous year. Alipay, which together with its rival third party payment provider Tencent’s WeChat Pay, account for as much as 96 per cent of nation’s mobile payment market.

Given their dominance, the two operators are “systemically significant infrastructure” operators in China, Mu said. It is precisely their dominance that prompted the central bank to commence research into its own digital currency – under the direction of former governor Zhou Xiaochuan, as early as 2014 – to provide a contingency payment option in the event of technical problems that harm the nation’s financial system.

Mu kept a tight lip on when the People’s Bank will roll out its digital currency. It is likely to be a nationwide roll-out that caters specifically to those underserved by the existing banking network, such as the estimated 800 million people classified as China’s rural population, Mu said.

The digital currency is likely to be used to support small retail transactions, and will be separate and distinct from the nation’s bank deposits, and won’t bear interest rates on any balance that the e-wallet keeps track on. It is unlikely to compete with either Alipay or WeChat Pay, Mu said.

“The two companies are providing a use case for end users,” Mu said. “We are not changing their use cases; their services will remain the same. In the future, I can only see synergy, not competition with them.”

Today, the payment services of both Alipay and WeChat Pay have evolved to cover various types of offline payment at merchants both within and outside China.

He said the other driver for the Chinese central bank on its digital currency is the increasing popularity of bitcoin, as the central bank responds to safeguard its sovereign currency.

At the panel discussion, Mu was also asked about the position on the Chinese monetary authority on Libra, which is the stable coin being mooted by Facebook.

Mu said that all the central bankers should put Libra under close supervision; and for China, the People’s Bank is “more than ready” to accommodate supervision on the Libra. He added that it is important though that in any such attempt to introduce Libra to China, the issuer must respect all the foreign exchange rules of the Chinese central bank and the State Administration of Foreign Exchange (SAFE).

For more insights into China tech, sign up for our
tech newsletters
, subscribe to our
Inside China Tech podcast
, and download the comprehensive
2019 China Internet Report
. Also roam
China Tech City
, an award-winning interactive digital map at our sister site
Abacus
.
This article appeared in the South China Morning Post print edition as: Digital yuan tsar says PBOC will support cashless tourism