Chinese Cashless Society
During the corona pandemic in 2020 we all started using cashless payments in Europe. However, China can already be called a cashless society since a few years. Already in 2018 more than 80% of all payments were made via mobile payment modes, such as Alipay or WeChat Pay. This includes online payments on e-commerce platforms as well as offline payments in shops, restaurants or other public places. Obviously, COVID-19 has boosted mobile payments even more.
In China, QR codes are everywhere, and most Chinese people don’t carry cash any longer. Nowadays, even payment by facial recognition is becoming increasingly popular in China.
If you run a webshop, targeting Chinese consumers can be quite a challenge. First of all, due to the ‘Great Firewall of China’, most Chinese people will not even find your website. Furthermore, they don’t use the search engines like we do, such as Google. And finally, even if they end up on your webshop, there are more obstacles to overcome: many Chinese people cannot communicate in English, they cannot pay in EUR and don’t have credit cards, and how will you organize logistics?
Nowadays there are service providers in Europe which offer Chinese payment solutions, like Union Pay, WeChat Pay or Alipay. Through API Integration and e-commerce plug-ins it is possible to get paid by your Chinese customers on your foreign webshop. But it’s clear, you shouldn’t expect any miracles if you want to access the Chinese market from your foreign webshop.
You may consider setting up a webshop on one of China’s cross-border e-commerce platforms, such as Tmall Global or JD Worldwide. As a merchant you can then set up an Alipay or WeChat pay account and, after your customer makes the payment in RMB, you will receive your money in EUR on your foreign bank account.
There is one more interesting new development: in several cities in China the People's Bank of China (PBOC), China’s Central Bank, has piloted the Digital RMB (in Chinese 数字人民币, also called E-CNY or DCEP). Recently more and more Chinese banks are joining this program and it is slowly also opening up to the general public. For example, in Shanghai shops you can already use this digital currency to pay for a drink in convenience stores.
The digital RMB is undoubtedly expected to establish an important piece of the infrastructure for the long-term development of China’s digital economy and promote the country’s competitive edge in the fourth Industrial Revolution. The digital RMB may bring about a lot of business opportunities and has the potential to disrupt several industries.
Stay tuned for more news about this in the future.