"The Cashless Society Has Arrived— Only It’s in China"
that's a sour grapes headline on wsj . I personally experienced the payment process with Wechat in China. I purchased my breakfast by scanning the QR code on food cart. I also paid my taxi driver by transferring funds to his Wechat account. There're different ways of using wechat (or alipay):
- Transfer directly to personal account. This is widely used by small businesses since it doesn't require any other devices. The store can print out their QR code and ask the customers to scan it. The customers will need to input the amount by themselves and initiate the transfer. Within seconds or comparable to using credit card, your payment will by confirmed on vendor's wechat account, and the amount received will be read out if set so. No paper receipt will be printed out if using this method.
- Show your personal bar / QR code to the cashier. You can scan it on a scanner by yourself or the cashier will scan it for you. You will get a traditional paper receipt this way.
There's absolutely no fees transferring or receiving funds. For wechat, you'll need to pay a small fee if you want to withdraw your fund from wechat account to your bank account. The fee is mostly used to cover the expenses dealing with the banks. I assume it's similar for alipay. Wechat (or alipay) is apparently superior comparing to using cash. I think they're also better than credit cards:
- Small businesses don't need to pay any fees to use wechat. When using credit card, small businesses need to purchase POS device and pay fees for every transactions. When using alipay or wechat, you only need to print out your QR code.
- During the transaction, you don't need to give your phone to the cashier. When using credit card, a lot of times, the cashier or waiter will take your credit card out of your sight for a moment, which increases your risk of stolen credit card info.
- You don't need to carry so many credit cards in your wallet. Each issuer of your credit card will send you a different cards, even from the same bank. With wechat / alipay, no more cards in your wallets.
- Your transactions will show up in one place. Instead of remembering 10 different bank logins, you can now always go to one or two places to check your payments.
How widely are wechat / alipay used ?
I have difficulties of setting up my alipay account since I don't have a Chinese bank account. But, I'm sure in China, everyone, I mean everyone who has a smart phone, has wechat installed. And you don't need bank accounts to use wechat for payments (you can connect it to a credit card or someone can transfer funds to your account). Also, I noticed alipay is slightly more accepted than wechat. I have to transfer funds to the waiter's personal wechat account in a restaurant since they only accept alipay. China now has about 600 million smart phone users, and wechat has 1 billion monthly active accounts. In 2016, Chinese spent 5.5 trillion USD with mobile payment, about 50 times the amounts in the United States. So when the wall street journal said a beggar displayed a QR code for money, they're not joking. I'm very confident that in the cities, mobile payment will cover 99 percent of scenario. For the one percent that you cannot use your mobile, you can always ask someone for help and transfer funds to them.