Merchants outside of China who have the QR code technology to accept Alipay and WeChat Pay are part of a growing trend to serve Chinese tourists who are comfortable paying via their smartphones.
Despite these wallets' popularity, Western merchants are more likely to accept wallets based on NFC contactless payments. To serve Chinese tourists, having the proper coding and gateway connections to accept the QR codes for these ultra popular mobile wallets has to come first — and it doesn't happen simply because the POS accepts other forms of mobile payment.
The merchant terminal also has to be able to read what the Chinese consumer is displaying via the phone.
"QR code capabilities represent a separate platform and separate set of rails, and it requires that some new connections be made and new processes be built into the payment processor's system," said Thad Peterson, senior analyst with Boston-based Aite Group.
For that reason, some European wallet providers have been working with Alipay to develop a
Much of this attention rides on the crest of how the
Santa Clara, Calif.-based Citcon, a cross-border mobile payment and commerce provider, has worked with Alipay, WeChat Pay and China UnionPay in the past and is taking its next step in expanding into Europe. Citcon launched in 2015 to establish a multi-channel technology for those serving Chinese customers online, in-store or through mobile apps.
Of all the payments technology Citcon provides clients, it says that the Chinese mobile wallets have been the most popular. It has delivered the proper QR coding for those wallets to be accepted at the POS in hotels in Las Vegas and other popular U.S. sites, and is prepared to deliver technology to European merchants that prepare them for Chinese visitors and allow merchants to also accept other wallets.
"For the QR codes displayed on consumer phones, each wallet will have its own identifier" that the POS must read, said Chuck Huang, founder and CEO of Citcon. "For a merchant to present merchant-side QR codes for consumers to scan, those QR codes would be agnostic."
Merchants present their own QR codes for various reasons, from applying discounts to providing product information or, in a restaurant, to open menus or place orders in advance.
Use of QR codes for payments or coupon redemptions isn't a passing fad. Juniper Research predicts that
Potentially even more compelling, technology companies are quick to educate merchants that taking on the QR code technology and coding needed to accept the Chinese mobile wallets simply opens the door for more
As such, it will be important for any provider of QR code technology to be able to support various payment types in the future, Aite's Peterson said.
"I have not heard of a lot of processors being resistant to QR coding, but I do think it is something that not all processors know a lot about and are completely comfortable with," Peterson said. "So, this is an interesting niche for Citcon to be able to do this."
It is even more important that a company can handle all wallet acceptance, Peterson added.
As details shake out on the European or any other merchant landscape regarding wallet acceptance, it is not likely many will want to deal with more than one stand-alone processor "for a really limited percentage of their volume" in capturing QR codes from Chinese tourists, Peterson said.
"Getting into Europe is great, but there all types of alternative payment platforms there, and most will have to offer more than just accepting Alipay and WeChat Pay," he said.
