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It’s Time for Australian Businesses to Board the Chinese Payment Train

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By Published On: November 4, 20190 Comments

Australian retailers and customers are well equipped to face the changing face of retail. In order to stay up to date though, Aussies may need to jump on the Chinese payment train.

The payment landscape is dynamic, complex, and fast-paced: the digitisation of the 21st Century has transformed the way we order, receive and pay for goods. Technological innovation has seen mobile and digital payments rapidly gain ground, with cards being the preferred method of payment for consumers. Not only has this Fintech revolution changed the way we pay for goods, but it has also shifted the balance of power from the businesses to the consumer, driving the growth of over 300 online payment methods.

As with any advancement in technology, what becomes the norm then becomes the expectation: as the payment landscape evolves, so does the customer attitude. This means businesses have no choice but to listen to their customers in order to maintain their competitive edge within the market.

The world is seeing a diversification of payment solutions and technologies that transcend demographic, geographic and generational boundaries. Developed markets have fully embraced cards and are now spearheading the adoption of new mobile and other alternative payment methods. Far from following by example, developing markets are learning from those before them and skipping a step entirely, leapfrogging straight from cash to mobile payments. As a result, card usage has plateaued, while mobile payment infrastructure has exploded.

China and the App-Based Boom

A major contributing factor to this shift in the payments landscape is the increased presence of emerging markets such as China, which has invested heavily in the technology necessary to address these modern consumer payment needs. In recent years, we have seen the boom of Chinese app-based payments services. Mobile apps such as Alipay and WeChat have taken Asia by storm boasting over 900 million active users each. What’s more, digital wallets in China now account for more than a third of card-present purchases as more and more Chinese consumers opt for these quick and secure apps to make their purchases.

Seeking a Frictionless Experience

Like the Chinese, Australian consumers also expect a seamless experience. They are very much driven by a ‘tap-and-go’ culture and seek efficient and smooth payment methods, which eliminate any friction at the checkout. The proof is in the pudding for Australia and New Zealand, as Australians are the world’s leading contactless payment users, with 325.4 million contactless payments made in 2017 – up from 258.6 million in 2016.

Australians have already embraced eWallet technologies, and with Australia’s predicted growth of 37 per cent by 2022 in E-Commerce, we can anticipate that tech-savvy Australian consumer will become increasingly receptive to other alternative payment methods that are seamless and able to keep up with their fast-paced lifestyle. Chinese app-based payment services certainly fit the bill, so it will be interesting to see whether Australian consumers adopt them when/if they become available.

Embracing Change

Australian consumers aren’t the only ones looking to adopt new technologies. Australian businesses are embracing new types of technology that has enabled them to access a broader market and tap into the large Chinese contingent travelling and living in Australia. According to Tourism Australia, there are currently about 1.4 million Chinese tourists in Australia every year. On average Chinese tourists spend more than $8,000 on a trip to Australia, compared to $5,000 spent by other international travellers, which clearly presents another reason for merchants to enable popular Chinese payment methods.

Businesses need to ensure they adapt to an alternative set of expectations and realise that apps like Alipay and WeChat, aren’t just payments app, they represent a lifestyle choice for consumers as well as integrate the benefits of online and in-store shopping into a holistic experience.

Enabling lifestyle super apps such as WeChat and Alipay will clearly benefit Australian businesses: as the world continues its digital revolution and the payment landscape alters, it is imperative that business owners cater for this new wave of Chinese technologies. It is time to start embracing new technology infrastructure and jump aboard the Chinese payment train!

Alison Morris is the VP Commercial, Merchant Solutions at FIS. 

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