Abacus interview: thoughts on mobile payments for foreigners

Recently both Alipay and WeChat Pay, the two leading mobile payment platforms, announced that they are enabling mobile payments for visiting foreigners. Previously foreigners could only use mobile payment if they had a Chinese bank account, which normally requires a visa that allows temporary residence in the country. It is extremely difficult, if not impossible to open a Chinese bank account if you don’t actually live in China.

For the study tours that ChinaTalk organises we normally try to enable mobile payment for the participants since we consider it to be an important part of the Chinese digital experience. A few months ago I discussed the possibilities of mobile payment for foreigners with Karen Chiu, a reporter for Abacus, a unit of the South China Morning Post that reports China (tech) news in bite size chunks. When the news broke about WeChat and Alipay opening up for tourists she contacted me to ask about my opinion and our experiences with our tour groups. Karen used some of my feedback for a quote in an article called Great Paywall of China – Why it’s a big deal that Alipay and WeChat Pay are opening up to tourists. As you can read I don’t fully subscribe to the hype around this news. Below you can read the full statement I gave.

“Yes, I heard about the new options in WeChat Pay and AliPay. I haven’t tried them out yet but it should be a great solution for the participants in our study tours.”

“I do however think the necessity for tourists is overrated. In China, you can still pay with cash everywhere (not counting a few places like unmanned stores), so mobile payment is not absolutely mandatory. I also doubt if a majority of tourists will go through the hassle of downloading an unfamiliar (scary?) Chinese app and entering so many personal details for a payment method they are totally unfamiliar with. I would think many would still prefer cash and (where possible) credit cards.”

“For people that visit China regularly and don’t have a Chinese bank account this would however be a great solution and I have seen a lot of positive feedback from people in this group.”

On the question how we’ve been dealing with the limitations until now: “On our earlier tours I assumed it was impossible to let participants experience mobile payment because of the necessity of a Chinese bank account. In WeChat it was possible to link your foreign credit card but you couldn’t actually transfer money from it to your wallet or have it charged directly for transactions in WeChat Pay. Also, we found that some Dutch banks immediately block the 5 cent transaction that Tencent made to their bank accounts because it was considered ‘suspicious’.”

“One of the participants on an early tour was a very tech savvy ICT guy and he found two loopholes.

  • You can use an online broker like Vpayfast to transfer money to your wallet.
  • A WeChat user with a working WeChat wallet can give you a relative card in WeChat. Relative cards are more like ‘pocket money’ that parents can give their kids. Money spent by the recipient is deducted from the wallet of the person that gave the relative card, up to a maximum amount per month.

Since the first option was much more complicated and since I read a lot of negative feedback from people that never receiving money they sent some of these brokers, I have been using the second option on our tours.”

“The disadvantage is that you can only hand out a maximum of 4 relative cards. But between me, my wife and sometimes a local guide we were able to arrange this; not everybody in the group wants to try out mobile payment.”

“A serious problem with WeChat though is the registration and verification process. On the international version it has become very strict and often you need to find a ‘friend’ that has been active on WeChat several months that can verify your account. Normally the participants on our tours don’t have such a friend and I can only verify a limited number of people. Then, when people are finally registered and I add them to a chat group some of them immediately get blocked and can not activate their account again.”

“So getting everybody on WeChat has been a pain in the ass and on some tours we still had participants that were not able to use the app. Seemingly Tencent has done this because of clickfarm abuse, but they seriously need to solve this issue if they want tourists to use their app.”

Update November 11th

On November 10th I went through the instructions of an Alipay-sponsored post on The Beijinger to activate ‘Tour Pass’. When trying to load 100 RMB from my credit card to Alipay I got the following message.

I did not receive any ‘SMS notification’ from my bank and the activation of ‘Tour Pass’did not succeeed. I thought ‘well srew it’ and went about my business.

Later that day I needed to book a flight ticket and car rental. I found that my Mastercard was no longer accepted. I called my bank (Raobank) and they informed me that my credit card had been flagged because of a suspicious payment request by ‘Tour Pass’ from China. When followed by a request for a large payment (flight ticket) my credit card got fully blocked. Even the bank’s standard procedure of releasing the card proved insufficient and it took me 3 phone calls and answering lots of security questions before the bank released my card.

So, Alipay might be promoting this service and it might work on their side but at least some of the banks on the customer’s side are not informed. Expect some serious issues if you use this service.