The Bankwatch

Tracking the consumer evolution of financial services

Why do third world countries own payment modernisation – Softbank takes the challenge on

This is a backgrounder on payments in China.

First Africa (M-Pesa), now China (WeChar, and AliPay). While the west juggles with multi million dollar upgrades, China eliminates can and credit cards by replacing with a QR code on a piece of paper or a phone screen.

This has become a central topic because of Softbanks investment in the technology coupled with Japans crazy infatuation with cash.

With his reputation on the line, Japan’s most controversial tech investor needs a win with the PayPay app []

At a glance, PayPay is the kind of mobile wallet commonly seen across Asia. Users download the app, link their bank account and top up money to their PayPay account. They can make payments either by scanning a QR code at a shop or having a clerk scan the app’s unique bar code.

This update from the Nikkei Asian Review is fascinating and scary at the same time. For further explanation on how it works, because this is not obvious to us westerners.

how do mobile payments in China work? []

Also, mobile payments have been so successful in China because they are fast and straightforward. And this speed is possible thanks to the QR codes. In China QR Codes are everywhere; even street musicians have a QR Code to collect money.

There are two ways to pay via QR Codes in China: The customer scans the seller’s QR code, which is very often printed and visible at the checkout, on restaurant tables and even on products in some stores. The customer then chooses the amount and can send the money directly to the seller.

The customer shows the QR code displayed on his smartphone, and the seller scans it. This method is even simpler and faster because the customer has nothing to do; it is up to the seller to select the amount that will then be deducted from his mobile wallet.

China has therefore quickly adopted mobile payment, and this is mainly because it is very easy for sellers. Unlike Apple Pay, where sellers have to buy technology to receive a payment, in China, a simple piece of paper printed with the QR code is enough.

Written by Colin Henderson

September 11, 2020 at 13:26

Posted in Uncategorized

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