WeChat Enables Foreigners to Pay with Overseas Cards in China
Tencent’s latest WeChat Pay upgrade enables foreign users to link international cards, enhancing mobile payments in China and aligning with efforts to attract international tourists and boost domestic consumption.
On July 20, 2023, Tencent, in collaboration with leading international financial services providers like Visa, Discover Global Network, JCB, and Mastercard announced significant improvements to the mobile payment experience for foreign users in China.
Tencent has expanded the WeChat Pay merchant network across multiple cities in China, providing support to merchants in various sectors, including dining, transportation, retail, and hospitality. This development will facilitate diverse payment methods like QR code scanning, in-app purchases, and WeChat Mini Programs, offering added convenience to users.
WeChat Pay had already allowed international credit card binding since 2019 and conducted trials with select merchants in essential sectors. With this recent development, inbound travelers, including those with passports and various permits, can now easily utilize WeChat Pay and link their international bank cards to make purchases at millions of merchants.
Moreover, to enhance the payment experience for users making frequent small transactions, WeChat Pay will bear the transaction fees for international card transactions below RMB 200 (US$27.82), providing users with fee exemptions during payment.
This move by Tencent aligns with the plans previously released by the State Council and the National Development and Reform Commission, aimed at improving mobile payment solutions for inbound tourists and increasing their convenience in making payments ahead of major international events, such as the 2022 Beijing Olympic Winter Games. At that time, the authorities encouraged domestic payment service providers to collaborate with overseas card issuers within legal and regulatory frameworks to offer mobile payment services to foreign visitors.
With China hosting various international events in 2023, such as the Chengdu FISU World University Games and the Hangzhou Asian Games, the number of inbound visitors is expected to rise. Tencent’s expansion of the WeChat Pay merchant network will significantly enhance the mobile payment experience for foreign users, further promoting China as a preferred destination for international travelers.
Below we delve into how foreign users can make payments via WeChat Pay. We provide comprehensive details on the process, timing, and relevant sources for further information.
How can foreign users make payments in China via WeChat?
Foreign users can make payments via WeChat by linking their international credit or debit cards to the WeChat Pay platform. After entering the Chinese mainland, foreign visitors can easily set up WeChat Pay on their WeChat app and proceed to add their international cards issued by Visa, Mastercard, JCB, or Discover Global Network.
Once the cards are successfully linked, foreign users can use WeChat Pay to make payments to merchants across various sectors, including dining, shopping, transportation, and hotel accommodation.
This convenient and seamless payment method enables foreign users to “pay like a local” in China, without the need to carry cash or open a Chinese bank account.
What documents are required for setting up WeChat Pay?
Currently, six types of documents can be used to open a WeChat Pay account. These are:
- Foreign Permanent Resident ID Card
- Mainland Travel Permit for Hong Kong and Macao Residents
- Mainland Travel Permit for Taiwan Residents
- Residence Permit for Hong Kong and Macao Residents
- Residence Permit for Taiwan Residents
These documents are all accepted for the registration process of WeChat Pay.
How to bind foreign cards to WeChat Pay?
To bind their foreign cards to WeChat Pay, users can follow these simple steps:
- Make sure the app is updated to its latest version.
- Open WeChat and go to the “Me” section.
- Tap on “Wallet” to access your payment options.
- Click on “Bank Card” and choose “Add a New Bank Card.”
- Enter the card number, select the type of card, and the issuing organization. Fill in the required card and personal information.
- Once everything is filled out, click “Submit.” A confirmation message will appear when the binding is successful.
After the verification, an SMS verification code will be sent to the phone number provided earlier. Enter the code to complete the verification process.
During the card binding process, the mobile phone number needed for verification should be capable of receiving SMS verification codes. Importantly, this number does not have to be a mobile phone number from mainland China, but it can also be a foreign number.
Finally, create a 6-digit payment password to ensure the security of your WeChat Pay account. Once these steps are completed, users can start using WeChat Pay with their foreign card for various transactions at millions of merchants, making payments in China as convenient as possible.
Are there transaction fees?
Following the latest update, transaction fees will be waived for single transactions below RMB 200 (US$27.82).
For transactions above RMB 200 (US$27.82), a 3 percent transaction fee is charged. If you request a refund for a transaction, the fee will be reimbursed proportionally based on the refunded amount.
How is the exchange rate calculated?
The exchange rate is calculated based on the exchange rate of the card organization and of the issuing bank of the international card.
What are the limitations for foreign cards on WeChat Pay?
It is important to note that there are some limitations when using a foreign card with WeChat Pay.
Currently, foreign cards do not support features like red packets (known as hongbao in Chinese, a kind of monetary gift used during holidays or special occasions in China, which has also been incorporated into digital payment platforms including WeChat Pay) and direct transfers, as they are restricted to daily consumption transactions – which include direct purchases of goods and services.
Additionally, there are certain transaction limits when using foreign cards through WeChat Pay. The maximum amount for a single transaction is RMB 6,000 (US$834.75), with a monthly cumulative limit of RMB 50,000 (US$6,956.23) and an annual cumulative limit of 60,000 (US$8,347.48).
Can Alipay bind overseas cards too?
Yes. In May 2023, Alipay also released a guide titled ”All you need to know when adding overseas bank cards in Alipay.” Their international card service is quite similar to WeChat Pay in terms of recommended usage scenarios, transaction fees, and exchange rate calculations.
However, WeChat Pay has expanded its support for international card types by adding JCB cards, while Alipay does not offer this option. Additionally, when it comes to transaction limits, Alipay allows a maximum of RMB 3,000 (US$416.88) per single transaction, whereas WeChat Pay allows up to RMB 6,000 (US$833.76) per transaction.
Mobile payments in China
China’s mobile payment market is one of the most advanced in the world and is expected to reach a value of US$37.15 trillion by the end of 2023, maintaining an annual growth rate (CAGR) of 8.38 percent between 2023 and 2028.
The market’s remarkable growth can be attributed to several key factors that have reshaped the payment landscape, including the rise of a cashless society, which has gained significant momentum in recent years. Additionally, the thriving e-commerce market in the country has contributed to the surge in digital payment adoption.
Unlike some countries that underwent a gradual transition from cash to credit cards before embracing mobile payments, China has taken a unique path. Credit card usage in the country, particularly for e-commerce, remains relatively low compared to other payment methods.
A key enabler of this transition is the widespread availability of QR codes, which have played a pivotal role in facilitating fast and convenient mobile payments. These codes can be found at various shops and establishments across the country, further encouraging the adoption of digital payment methods.
Major players like Alibaba and Tencent have also had a major impact in the shift away from cash through the introduction of AliPay and WeChat Pay. These digital payment platforms have emerged as powerful entry points to vast ecosystems of both offline and online goods and services, providing users with seamless and convenient payment experiences.
Tencent’s recent upgrade to WeChat Pay, enabling foreign visitors to link their international credit or debit cards, puts it in direct competition with Alipay’s similar service for overseas users. While both platforms offer comparable functionalities to cater to the needs of international users in China, they employ slightly different approaches to enhance the payment experience.
WeChat Pay’s upgrade is specifically tailored to foreign users in China, providing them with seamless access to millions of merchants across various sectors. By allowing international credit or debit card linkage, Tencent aims to simplify payment processes for inbound travelers and expatriates, promoting a cashless and convenient payment environment in the country.
On the other hand, Alipay had previously allowed overseas users on the Chinese mainland to access local merchants using their international bank cards.
Boosting consumption and China’s reopening
In the past, short-term overseas travelers in China may have encountered challenges in making everyday payments, as many businesses predominantly accept mobile payments rather than cash or traditional card methods. This situation often posed difficulties for international visitors, as they needed to navigate the complexities of setting up Chinese bank accounts to access mobile payment services fully. Moreover, the limited acceptance of international credit or debit cards restricted the seamless payment experience those foreign tourists desired during their stay in the country.
The timing of WeChat Pay’s latest update is not a coincidence. As China reopens its doors to international travelers after three years of dealing with the COVID-19 pandemic, there is an increasing emphasis on enhancing the overall experience for foreign tourists. This upgrade aligns with the nation’s commitment to providing a welcoming and convenient environment for visitors, making them feel at ease while exploring the country’s vibrant culture and attractions.
Moreover, the upgraded WeChat Pay service aligns perfectly with China’s broader economic goals, particularly its drive to boost domestic consumption. By providing foreign users with access to millions of merchants across various sectors, Tencent hopes to stimulate spending by international visitors, contributing to increased consumption and revenue generation within the Chinese economy. This aligns with China’s strategy of encouraging domestic consumption as a key driver of economic growth.
China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done so since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at firstname.lastname@example.org.
Dezan Shira & Associates has offices in Vietnam, Indonesia, Singapore, United States, Germany, Italy, India, and Russia, in addition to our trade research facilities along the Belt & Road Initiative. We also have partner firms assisting foreign investors in The Philippines, Malaysia, Thailand, Bangladesh.
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