An Overview of Popular Online Payment Methods in China
How to be paid timely and safely is a major concern to foreign businesses that want to enter China’s market, especially when you own an online shop. Some clients of ours decided to go with credit cards like they did in other countries when they first came to China. This, unfortunately, was a bad choice that shut the door on a large part of their customers when these customers had just happily picked some items, rushed to the shopping cart and was going to pay them…
A quick fact: in 2011, the total number of credit cards in China is around 268 million – that’s around one in five Chinese people has a credit card. Hmmm, wait a minute, that doesn’t sound bad, does it? But the thing is credit card owners don’t use them to shop online. Read on.
What on the earth do the Chinese people use to make payments online?
Below is a chart that illustrates the market share of online payment services regarding transaction volume in Q4, 2011, according to Analysys International, a provider of information product, service and solution in China internet market:
Here is the list:
What the payment methods should your online store support?
The ultimate combination is Alipay + online bank transfer. Because:
- Alipay is the most widely used and loved online payment method here;
- Most online stores are using the combination here in China. That’s something;
- People use Tenpay are very possibly also Alipay users, so you don’t necessarily need a Tenpay account for Tenpay users;
- Online banks are for those who have no Alipay accounts, and very possibly no Tenpay and others either.
A little more about Alipay:
Alipay is an online payment service that belongs to the Alibaba group and supported by Alibaba, Taobao and an increasing number of independent online stores.
How does Alipay work?
Alipay, different than PayPal, handles online payments in a way that is called escrow and values buyer protection very much, which mainly goes as follows:
- The buyer chooses a product and makes the payment to the seller via Alipay;
- Alipay, instead of transferring the money to the seller’s Alipay account immediately, keeps the money as escrow and informs the seller that the buyer has made the payment. At the time the money is neither directly controlled by the buyer nor the seller;
- The seller sends the product to the buyer;
- The buyer receives the product, and makes confirmation in their Taobao or Alipay account;
- Alipay receives the buyer’s confirmation, and sends the money to the seller.
This is kind of the reason why Alipay is so much loved by the buyers.
You may be wondering what if the buyer is the evil one, and doesn’t confirm the receipt? Taobao and Alipay do have a solution. They track the No. of the express delivery to monitor the status of the product and if the buyer takes no actions in 7 days, or 14 days in some cases, the product will be automatically confirmed by the system and the money will be sent to the seller’s Alipay account.
How can you get yourself an Alipay account?
If you don’t have a valid ID card or business certificate issued by the Chinese government, getting an Alipay account is a little harder. You need to upload a digital copy of your passport to verify your own identity, an entry permit, a Chinese bank account, and a native Chinese guarantor that needs to provide his/her own ID card number to verify his/her own identity.
Moreover, Alipay has enterprise solutions for overseas companies that need to collect payments from their Chinese buyers in RMB.
Having other questions on how to receive payments from your Chinese customers? Don’t hesitate to leave a comment or reach us at firstname.lastname@example.org.Date: April 21st | Topic: China SEO Tips, Facts and Everything Else | Author: Nicole