“The payment market, especially mobile payment, is one of the segments in which China is actually moving much, much faster than the US market. Americans would be surprised at how deep the penetration is for WeChat pay and Alipay in China’s mobile payment business. In the US it’s very hard for you to imagine that you can use your mobile to pay for almost anything in life – taxis, shopping, movie tickets, restaurants, the list is endless. In the US, people still carry dozens of cards in their wallet or purse and they swipe these cards almost everywhere. This is why companies like Square, for example, can do very well in the US because it helps consumers do business with small and medium sized merchants who couldn’t otherwise afford payment terminals.
Remember also that in the US the concentration ratio of the retailers is way higher than in the Chinese market. So this is why, for example, if you look at Apple Pay and even Google’s Android Pay, while they were very advanced technologies there’s huge opposition from the large merchants. Companies like Walmart, Target and Starbucks would rather have their own payment systems.
Apple Pay is definitely not a first mover in China; it’s a sort of a late mover in the market. They have to work very hard to increase their penetration ratio of the payment terminals here. But almost all the grocery stores in China, especially in the big cities, are already occupied by the free bar scanners offered by Tencent and Ali. So there’s a long way to go.” ~ Yu Zhang, CEIBS Prof. of Management

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