WeChat Pay’s Challenge to Card Payment processors in Europe
Tencent’s main focus in the current market scenario is going global with all the products possible. Tencent is targeting the European market for expansion of its WeChat Pay services. This is because the trend for digital cashless payments is high in Europe. On top of that, there is always an increasing number of Chinese tourists traveling in various European countries. As a matter of fact, according to an annual tourism report, nearly 149 million Chinese tourists travel abroad and out of them, 11% are bound towards various European countries. This is why Tencent is so much more interested in dominating the European countries in the card processors industry.
Europe and Digital Payment Service –
Nearly 34% of the total payments done by Chinese tourists are cashless payments. In a survey, nearly 94% of Chinese tourists have stated that they are more interested in making digital payments when they are in overseas countries. Even most of the overseas countries and mostly the European countries prefer citizens and tourists to use cards for transactions. When it comes to Chinese citizens, almost everyone uses WeChat and therefore, they are familiar with WeChat Pay and digital payments. That is why WeChat payment for tourist is quite popular overseas. In fact, WeChat Pay network has increase nearly 3.5% in Europe from April 2018 to April 2019.
The expansion of WeChat Payment for tourist service is at its beginning now, and in the coming years, there will be a rapid increase in its use in the European countries. To make it all the more useful for the Chinese tourists, WeChat is allowing to users to pay in Yuan currency, and the app automatically converts the Chinese currency into local currency depending on whichever part of the world the users are. It is needless to say that this unique feature that made WeChat as one of the digital payment processors by far. There is no doubt that it is a direct threat to the card payment processors as people find it more convenient to pay by their regular WeChat app than by card.
WeChat Challenging Traditional Card Payment –
With the introduction of more convenient features like easy currency conversion and even cashbacks and other offers, there is going to be a natural shift from traditional card payment processors to digital wallet payment processors. For the time being, the traditional card system has the majority of share in the digital payment market, and the share of digital wallet payment is increasing. This means the card payment processors have to be more transparent and offer more to the customers to retain them.
WeChat Pay directly possesses a threat to UnionPay. UnionPay is a Chinese brand that operates card payment networks currently all over the European countries. This is what Chinese tourists mostly use when they go overseas. But there are certain hidden fees, and tourists have the least idea about currency conversion rate while using a card. Due to this opaqueness, there is a shift from card to online payment. There is nothing scope for hidden charges as you get to see how much is deducted. Besides, on the app, you get to see various useful parameters such as conversion rates and likewise. Moreover, you can track your expenditure perfectly.
Conclusion –
WeChat team has aggressive expansion in mind when it comes to the European countries through Chinese tourists. They have already introduced a lot of features for the convenience of the tourists when they visit European countries and use WeChat Pay over the traditional card payment. In the future, there are going to include more such features and conveniences so that they can gain market share of digital payment world rapidly.