How to Take WeChat Payments as a Small Business

China Channel Case Studies

It’s no exaggeration to say that in 2015 mobile payments are taking over the Middle Kingdom! China is one of the first countries in the world where mobile payments have truely gained traction across society and are rapidly being accepted as the norm. Today, we’ll give you all the details on how to take WeChat Payments as a small business, because it seems that just about everyone is jumping on the mobile payment bandwagon!

HongShuPaymentsdd

“The Unimaginable Curve”

Payments Over Time2

 

During a presentation at last month’s Tencent Global Partner’s Conference in Chongqing the General manager of WeChat payments described the above chart as “The Unimaginable Curve”. It shows the amazing increase in popularity of WeChat transactions that has happened in 2015 and how this trend is still increasing week by week!

Shake

Above: Spring Festival Gala Show WeChat Lucky Money Envelopes Giveaway

Payment transactions across WeChat famously became popular due to the Lucky Money (hong bao 红包) giveaway frenzy of the Chinese Spring Festival Gala TV Show. The phenomenon made global headlines and was later described by Jack Ma as a “Pearl Harbor attack” on Alibaba’s Alipay service.

 

JackMa

Yet as we can see from the ‘Unimaginable Curve’, every day is now like Spring Festival in terms of payment transactions on WeChat! Payment transactions through WeChat are so much now that Tencent’s (parent company of WeChat) 3rd quarter results released on Nov 10th felt necessary to mention this:

“We are incurring significant bank handling fees on the C2C money transfers which we offer to users largely for free. We believe such cost represents a worthwhile investment for the future given the rapid growth in users binding their bank cards to their Weixin Pay or QQ Wallet accounts, and for the fast increase in monthly usage of such accounts.”
No numbers have been released stating the detailed amounts of the bank handling fees, but when a company as big as Tencent describes them as ‘significant’ you can be sure they are pretty large. This is why large transfers using personal WeChat accounts are no longer fully free as of last month:

WeChat Payment now charge a 0.1% fee on monthly money transfers* in excess of 20,000 RMB (around US$3,200) from October 17th 2015.

Promotional video released today showing McDonald’s recent cooperation with WeChat pay in Guangzhou

How to take WeChat Payments for my small business?
Taking mobile payments as a small business in China is easy to set up. We contacted a couple of companies offering these services to find out how it all works. Most small businesses purchase a handheld wireless POS (point of sales) machine, similar to the one below:

POS

Typical prices for this machine:

All-In-One POS Machine with Laser Scan Head
Typical Market Price: 1500 RMB

All-In-One POS Machine without Laser Scan Head
Typical Market Price: 800 RMB

The laser scan head will allow you to scan the payment QR code on the customer’s phone directly. The cheaper version of the machine will produce a QR code that must be scanned by the customer’s phone in order to complete the payment.

 

ChuanChuan

The POS machines we found allow payments through:

  • WeChat
  • Alipay
  • Baidu wallet
  • Chinese Debt Cards (no foreign)
  • Chinese Credit Cards (no foreign)

Service Fee Rates for different payment methods
A small service fee is charged for all payments through the POS machine. These vary depending on the type of transaction, all of which are less than 1%.

WeChat Payments: 0.6%
Alipay Payments: 0.6%
Baidu Wallet Payments: 0.6%
Bank Debt Cards / Credit Cards:  0.78%

 

Vying-for-Attention

Setting Things Up
In order to take WeChat payments, a company will usually first need to set up it’s own verified WeChat Service account. For Alipay, you will need a real name verfified Alipay account. There is a list of several documents that the company needs to provide including copies of business licenses, organization code, opening permit, pictures of the physical store etc. Once all the aplications are done, the machine is sent to the store by courier. There is an online platform to track all transactions throught the machine.

Final note: Contact us through the account or at info@chinachannel.co if you are interested in setting up mobile payments for your store, we can put you in touch.