Understanding Chinese Payment Systems - A Practical Guide for Tourism Operators - Queensland.com
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March 2019 Understanding Chinese Payment Systems A Practical Guide for Tourism Operators
Background
China is the largest and most valuable inbound visitor market Inbound Chinese Visitors to Queensland:
for Queensland. In the year ending September 2018, short-term Year Ending September 2018
Chinese visitors made 502,000 trips to the state and delivered
$1.43 billion to the Queensland visitor economy.1
More and more Chinese holidaymakers come to Queensland as
502,000
TRIPS +2.9%
free (flexible) and independent travellers (FITs). According to the
latest visitor visa statistics, only 23.6% of tourist visas issued to
Chinese holiday travellers are Approved Destination Status (ADS)
tour group visas. The rest of them visit Australia on regular FIT
visas. Younger millennial travellers (age 22 – 37) are more likely to $1.43B
travel independently than those from older age groups. +33.1%
Data Source: Tourism Research Australia
Preference of Chinese Travellers by Age Group
Data Source: McKinsey & Company - Chinese Tourists: Dispelling Myths
100
80
60
40
20
0
AGE 20–24 AGE 25–34 AGE 35–44 AGE 45–59 AGE >60
MIXED FIT (in destination tours) SEMI-FIT (flexible package) OTHER
FLEXIBLE & INDEPENDENT TRAVEL (FIT)
GROUP SIZE 21–50 GROUP SIZE 10–20 GROUP SIZE LESS THAN 10
1 International Visitor Survey (IVS) Year Ending September 2018
2 Understanding Chinese Payment Systems: A Practical Guide for Tourism Operators
Average Daily Expenditure
in Destination
$420
(¥2,040)
$7.50 AGED 20 & UNDER AGED 21 – 30 AGED 31 – 50 AGED 51+
vs 2017 $415 (¥2,000) $455 (¥2,200) $395 (¥1,900) $415 (¥2,000)
Data Source: Hotels.com – China International Travel Monitor 2018
As the inbound Chinese travel market shifts from group travel to According to a recent consumer research by Nielsen, Outbound
independent travel, more opportunities are created for tourism Chinese Tourism and Consumption Trends, 91% of Chinese
operators to capture in-destination expenditure. Recent research travellers indicated they would show greater willingness to
published by Hotels.com indicates that on average, a Chinese spend and shop if overseas merchants accept Chinese mobile
holiday traveller has the potential to spend up to $420 per day, payment, therefore for Queensland tourism operators to accept
and a millennial traveller could spend up to $455 per day. Chinese mobile payment they increase the ability to maximise
visitor spend from Chinese travellers.
A Chinese holiday traveller on average stays 10 nights in
Australia, visits two states and spends around AUD 4,600 per trip.
EXPENDITURE BEFORE ARRIVING IN AUSTRALIA EXPENDITURE IN AUSTRALIA
$2,347 $2,248
LOCAL AIRFARE $89 OTHER $130
LOCAL TOURS $122 ENTERTAINMENT $102
LOCAL TRANSPORTATION $124
I’NATIONAL PREPAID ACCOMMODATION / FOOD / DRINK / RETAIL
AIRFARE TOUR ACTIVITIES ACCOMMODATION SHOPPING
$566 $1,781 $860 $821
TAKE HOME USE HERE
$744 $77
COVER: Currmbin, Gold Coast THIS PAGE: Story Bridge Adventure Climb, Brisbane
Understanding Chinese Payment Systems: A Practical Guide for Tourism Operators 3
Chinese payment systems
Chinese consumers have limited access to Visa, MasterCard According to a recent survey by Ipsos, Third-Party Mobile
and American Express cards due to government regulation. Payment Users Research Report, it is estimated that China has
Instead, Chinese consumers use UnionPay debit and credit more than 940 million active mobile payment users. These
cards. Founded in 2002, UnionPay is the only state-run bank users on average transact 54% of daily living expenses using
card organisation that exists in China. Today it is also the largest mobile payment (Alipay and WeChat Pay), 27% using debit or
card payment organisation globally based on total value of credit card (UnionPay), and 19% using cash.
payment transactions, ahead of Visa and MasterCard.
As more destinations around the world accept UnionPay, Alipay
UnionPay’s dominance is now being challenged by a rapid and WeChat Pay, Chinese travellers nowadays carry less cash and
adoption of mobile payment by Chinese consumers. As of end prefer to use UnionPay cards or mobile payment where possible.
of 2018, Alipay, established in 2004 by Alibaba Group, is the
largest mobile payment platform in China with 54% of market For tourism operators in Queensland, offering UnionPay, Alipay
share by value. WeChat Pay, established in 2005 by Tencent, and WeChat Pay to Chinese travellers will a) make them feel
is the second largest mobile payment platform with 39% of welcome, b) provide payment convenience, and c) encourage
market share.2 more expenditure. More importantly, all three payment
platforms provide marketing opportunities for tourism operators
to directly target Chinese FITs.
Share of Transaction Value by Payment Method — Daily Living Expenses
CASH 19%
41% THIRD PARTY
MOBILE PAYMENT OFFLINE
Alipay, WeChat Pay
DEBIT OR CREDIT CARD
PAYMENT ONLINE 15%
UnionPay
DEBIT OR CREDIT CARD
PAYMENT OFFLINE 12%
UnionPay
13% THIRD PARTY
MOBILE PAYMENT ONLINE
Alipay, WeChat Pay
Data Source: Ipsos China
2 Analysys c/o Mary Meeker’s 2017 Internet Trends Report (slide 259)
4 Understanding Chinese Payment Systems: A Practical Guide for Tourism Operators
The payment ecosystem
Tourism operators (referred to as merchants) must work (BoQ) merchants could process UnionPay payments with a
with approved payment acquirers (also known as third-party special merchant facility through First Data.
enablers) to offer Chinese payment facilities. A payment
acquirer is a bank or financial institution that processes Alipay and WeChat Pay are currently offered by financial
payments on behalf of a merchant. institutions who are specialised in payment services such as
epay, SuperPay and AirPay. No financial institutions in Australia
At the time of writing, UnionPay is available via all four major have exclusive arrangements with Alipay or WeChat Pay.
Australian banks as its payment acquirers – National Australia Alipay is in active discussion with major Australian banks to
Bank (NAB), Commonwealth Bank (CBA), Australia and New have Alipay enabled in the future.
Zealand Bank (ANZ) and Westpac (WBC). Bank of Queensland
CHINESE CARD PAYMENT PAYMENT AUSTRALIAN
TRAVELLERS ORGANISATIONS ACQUIRERS BUSINESSES
MOBILE PAYMENT PAYMENT
ORGANISATIONS ACQUIRERS
Understanding Chinese Payment Systems: A Practical Guide for Tourism Operators 5Mechanism of mobile payment
Mobile payment is enabled through a matrix barcode called Customer scans merchant QR code
a QR code. Both Alipay and WeChat apps can either scan a
merchant QR code or generate a QR code for the merchant to
scan to complete the payment process.
There are two types of QR codes – static QR codes and
dynamic QR codes.
In a static QR code, merchant details are encoded in a fixed
QR code graphic and printed on an in-store display panel.
During the payment process, a customer scans the QR code,
enters the transaction amount and completes the payment
DYNAMIC QR CODE STATIC QR CODE
procedure. The merchant needs to verify the amount
entered is correct. Merchant scans customer QR code
A dynamic QR code is generated by the point-of-sale system
for each transaction, with merchant details and transaction
amount captured in a QR code graphic so a customer is not
required to manually enter the transaction amount. Dynamic
QR codes offer a more convenient user experience for
merchants and customers and provide a stronger protection
as each transaction could be uniquely identified.
Depending on the payment provider, dynamic QR codes can
be generated by an existing point-of-sale system that integrates Online booking using mobile payment:
mobile payment into the same terminal used to accept EFTPOS desktop site
and credit cards or alternatively, a standalone terminal may be
offered that processes Alipay and Wechat pay payments only.
Reporting functionalities will also vary from point-of-sale
integration to reports on terminals or specialised cashier apps.
Speak to a payment provider to understand what options are
available for you.
Mobile payment could also be used to pay for a booking in
advance. For a desktop website, a QR code could be generated
and displayed on the site for a user to scan and complete
payment process. For a mobile site or app, a mobile payment
gateway could be used to open up either Alipay or WeChat app
on the smartphone to finalise payment.
Online booking using mobile payment:
mobile site/app
6 Understanding Chinese Payment Systems: A Practical Guide for Tourism OperatorsAlipay’s marketing platform
For merchants, the added benefit of Example of a merchant listing on Alipay
Alipay is access to its powerful discovery
platform targeting Chinese travellers to
spend more in destination. All merchants
who accept Alipay are given a merchant
listing page on the Alipay app. This
merchant listing, similar to that of
Yellow Pages, can provide in-language
information about the business – name,
address, directions, contact details,
operating hours, products and services,
and coupons that Chinese travellers could
redeem online or in store.
The key to attracting Chinese foot traffic
is a coupon offer. Prior to departure or
while in destination, Chinese travellers
have a habit of browsing in-destination
coupon offers available in the Alipay app.
Alipay enables the user to easily collect
coupons of interest, and these coupons
influence travellers when they plan their
activities in destination.
Example of a coupon offers on Alipay
When a Chinese traveller arrives
in a destination, the Alipay app will
automatically detect a user’s geolocation
and display local coupon offers relevant
for the traveller. Merchants with coupon
offers are likely to see more Chinese
visitors in their shops.
Getting a merchant listing and coupon
offer right is critically important for tourism
operators to benefit from offering Alipay to
Chinese travellers.
Understanding Chinese Payment Systems: A Practical Guide for Tourism Operators 7Summary
Payment Type Card payment Mobile payment Mobile payment
Debit or credit card Smartphone via QR code Smartphone via QR code
Offline Transaction
Apple Pay
Debit or credit card Smartphone via QR code Smartphone via QR code
Online Transaction
Apple Pay Mobile payment gateway Mobile payment gateway
Payment acquirers Major Australian banks Payment service companies Payment service companies
in Australia Payment service companies
Transaction day + Transaction day + Transaction day +
Average settlement period
1 or 2 business days 1 to 3 business days 1 to 3 business days
Average merchant fee 1.5% to 2% 1% to 2% plus optional 1% to 2% plus optional
in Australia marketing service fees marketing service fees
Partnership with iTrip Alipay in-destination discovery In process of development
Marketing platforms
platform
Airlie Beach, The Whitsundays
8 Understanding Chinese Payment Systems: A Practical Guide for Tourism OperatorsGreat Barrier Reef, Cairns
Next steps
Steps to sign up Check whether you already have UnionPay facility:
to UnionPay: 1 Tourism operators who are with NAB, CBA, ANZ and Westpac most
likely have UnionPay acceptance already enabled on their EFTPOS
terminals. Please contact your merchant bank to confirm or find a
UnionPay card to test.
Tourism operators who are with other merchant banks or payment
solution providers might or might not have UnionPay acceptance
enabled. Please contact your merchant bank or payment solution
provider to verify UnionPay facility.
If you don’t have UnionPay facility and would like to have more
2 information on approved acquirers, please download “UnionPay
Payment Providers Checklist”.
Contact UnionPay or its approved payment acquirers to apply for
3 UnionPay facility.
Once UnionPay is up and running, please contact UnionPay or
4 Tourism Events and Queensland for a special window signage to
welcome Chinese visitors.
Understanding Chinese Payment Systems: A Practical Guide for Tourism Operators 9Next steps
Steps to sign up to
Alipay and/or WeChat: 1 Download “Mobile Payment Providers Checklist”
Select a couple of payment acquirers from the list and make initial
2 contact.
It is important to understand and compare service offerings before
selecting a payment acquirer to proceed. Please remember that no
financial institutions in Australia have exclusive arrangement with
Alipay or WeChat Pay. It is also advised to ask for merchant references.
The following list of topics could guide your discussion with
3 payment acquirers:
Mobile payment facilities provided: Alipay, WeChat Pay or both
Type of EFTPOS terminal solution offered: a standalone terminal for
Alipay / WeChat Pay, an integrated terminal that processes Alipay /
WeChat Pay as well as other payment option, or an option without
terminal (static merchant QR code, on-screen display of QR code on
existing POS system, a separate QR code scanner, etc)
Integration of mobile payment transactions with existing POS
system for reporting purpose
Online solution for bookings in advance: desktop site, mobile site
and mobile app
Structure of merchant fee: payment processing fee versus
marketing services fee (This is particularly relevant for Alipay)
Average settlement period and maximum settlement period during
peak Chinese holiday period
Provision of marketing services on Alipay discovery platform,
especially in-language merchant listing and coupon offers. Some
payment acquirers charge marketing services fee in addition to
payment processing fee, while other acquirers charge a combined
merchant fee. Please make sure you fully understand the scope
of marketing services and fee structure before deciding on a
payment acquirer.
Decide on a payment acquirer and connect business with Alipay /
4 WeChat Pay facility.
Once Alipay and / or WeChat Pay are up and running, please
5 contact Tourism Events and Queensland for a special window
signage to welcome Chinese visitors.
10 Understanding Chinese Payment Systems: A Practical Guide for Tourism OperatorsKey payment provider contacts
Payment
acquirers
Chinese
payment(s)
supported
Contact P: 1300 369 852 P: 1800 086 325 P: 1800 730 554 P: 1800 029 749
details nab.com.au anz.com.au commbank.com.au westpac.com.au
Payment
acquirers
Chinese
payment(s)
supported
P: 1800 655 204 P: +61 (0)2 9267 7711 P: 1300 966 639 P: 1800 767 338
Contact
firstdata.com dynamicg.com tyro.com currencyselect.com
details
Payment
acquirers
Chinese
payment(s)
supported
Mikel Wang James Cowlishaw Stanley Yan Clark Gu
Contact P: +61 (0)450 710 125 P: +61 (0)466 327 843 P: +61 (0)475 207 077 clarkgu@cnpay.com.au
details mikel@supaytechnology.com jcowlishaw@epayworldwide.com.au stanley_yan@airpayfintech.com cnpay.com.au
supaytechnology.com epayworldwide.com.au airpayfintech.com
Payment
acquirers
Chinese
payment(s)
supported
Patrick Tian Joseph Zhang Peter Thomas P: 1300 966 639
Contact P: +61 (0)430 217 027 P: +61 (0)488 888 037 peter.thomas@smartpay.com.au sales@tyco.com
details patrick.tian@acpaylink.com.au joseph.z@paylinx.com.au smartpay.com.au tyco.com
acpaylink.com.au paylinx.com.au
Payment
acquirers
Chinese
payment(s)
supported
P: 1300 016 666 P: +61 (0)3 8807 4400 P: +61 (0)3 9448 8865
Contact
info@omipay.com.au info@questps.com.au info@royalpay.com.au
details
omipay.com.au questpaymentsystems.com royalpay.com.au
Understanding Chinese Payment Systems: A Practical Guide for Tourism Operators 11Tourism and Events Queensland
GPO Box 328, Brisbane,
QLD 4001, Australia
T: 61 7 3535 3535
E: reception@queensland.com
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Disclaimer:
Tourism and Events Queensland has compiled and produced this publication in the interest of promoting
Tourism in Queensland. The information contained within this publication has been assembled and
included with all due care.
Tourism and Events Queensland makes no warranty or assurance as to the correctness, completeness or
suitability of purpose of the Information. In no event will Tourism and Events Queensland be liable to any
person in contract, tort or otherwise if any information in the publication is incomplete, inaccurate or not
suitable for the purpose you use the Information for.
Published by Tourism and Events Queensland
© Tourism and Events Queensland
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