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The secret payment ingredients to unlock a world of Chinese tourism: Alipay and UnionPay
Celia Pereiro
Head of Payments, Amadeus IT Group
English
This content is only available in this language.
Amadeus has recently signed agreements with two key payment players in China: Alipay and UnionPay. Alipay is China’s leading online payment service provider, accounting for nearly 50%¹ of all online payments. UnionPay is the leading local payment card in China and the largest in the world by cards in circulation (4.3 billion globally, according to UnionPay figures) – a remarkable achievement considering the company was founded only twelve years ago! Combined, these payment methods add up to almost 65% share of China’s online payment market. Due to their huge popularity, it is fundamental for travel providers to offer these options as methods of payment if they want to target the Chinese market.
In our recent Shape the Future of Travel: Macro trends report, we saw that China may overtake the US as the largest source of outbound travel spend in the world in 2014, as well as the world’s largest domestic market by 2017. Our airline and travel agency customers increasingly want to take advantage of the booming Chinese tourism market. The agreements with Alipay and UnionPay represent a new milestone for Amadeus Travel Payments as we reach far and wide to respond to their payment needs. Thanks to integrating the two providers into the APP, our customers will have a shortcut to the Asian giant by offering millions of potential Chinese travelers the option to pay with their preferred payment methods. Our customers are not limited to Chinese outbound travel – they will also be able to access Chinese consumers who live outside China.
The Chinese Payment Industry
Let’s take a bird’s eye view of the Chinese payment industry. First of all, payment preferences are quite different than their western counterparts. Whereas most buyers in the western world rely on traditional payment methods such as debit/credit cards, China is a very dynamic and young market where these methods coexist with innovative forms of payment, which have captured the trust and loyalty of Chinese consumers in relatively little time. If we take a look at online payment preferences in China, online bank transfers and eWallets (Alipay being the largest) are almost as popular as credit/debit cards (26%, 29% and 33% preference respectively)². Indeed, the most popular payment method providers are barely 10-15 years old, whereas in Europe and the US they have been long established.
Understanding local customs, tastes and preferences is vital before attempting to target the Chinese market, and this obliges travel providers to give some serious thought into adapting their payment solutions to satisfy them.
If travel providers do not offer their customers the possibility to pay with Alipay or UnionPay, they risk not making the most of China’s immense market potential. In the payments world unfortunately there is no global one-size-fits-all payment method, so travel providers need to serve and adapt locally first if they want to truly make a global footprint. Thankfully, with APP’s global coverage they will not have to worry.
[1] According toiResearch.cn
[2] Cybersource report on China e-commerce market
Tags
Asia Pacific, China