For boutique Portuguese chocolatier Arcádia tradition is everything. The family run business has been handcrafting iconic línguas de gato – literally cat tongues –using the same techniques for nearly 90 years, but when it comes to payment Arcádia has adopted an altogether modern approach.
The flagship outlet in downtown Porto became the first shop in Portugal to accept Alipay, the Chinese mobile payment platform with approximately 900 million users. As Francisco Bastos, Arcádia’s administrator, puts it “we want to be at the forefront and keep up with the changing habits of consumers.” Practically speaking, this means catering to the more than 260,000 Chinese tourists visiting the western European country each year.
Irrespective of a brand or company’s size, the trend of accepting Alipay is gathering speed across Europe. With 180 million Chinese travelers forecast to make outbound trips in 2019, the benefits of aligning with Chinese consumers have never been greater. While offering a China-friendly experience is important in terms of language and cultural sensitivity, providing maximum convenience at the point of sale is also greatly appreciated.
For years, Chinese travelers were hampered by unfavourable exchange rates and the limited number of merchants that accepted UnionPay, China’s main credit card issuer. The situation helped to develop the reputation of the Chinese tourists lugging around bundles of cash, but today the picture is changing and thanks to Alipay overseas transactions have never been more straightforward. The digital payment giant recently rolled out two major new initiatives in cooperation with its European partners so as to give Chinese travelers peace of mind – and curb the need to withdraw piles of cash.
Alipay in Europe
In early June, Alipay announced a collaboration with six European mobile wallet services. The goal is to establish a “unified” QR code that allows Alipay users to make payments at any location that already accepts one of the payment services. Once fully implemented, Chinese travelers will be able to make payments using Alipay across a network of 190,000 merchants in 10 European countries. The plan is to gradually expand the program to include more markets.
Aside from aiding the consumer, the new initiative is a major boost for retailers. The unified QR code means merchants can handle any Chinese customer who wants to pay with Alipay as long as they already accepts one of the six European mobile wallets.
Eric Jing, Chairman and CEO at Ant Financial, has hailed the collaboration as an important development, “we feel honored to help promote a smart lifestyle and digital experiences in Europe, while continuing to connect more merchants with more Chinese tourists,” Jing said.
The European mobile wallets partnering with Alipay on the project are Bluecode (Austria), ePassi (Finland), momo Pocket (Spain), Pagaqui (Portugal), Pivo (Finland) and Vipps (Norway). Alipay already serves around 1 billion customers with a similar program in partnership with local payment providers across Asia.
Tourists Turn to Digital Payments
This takes place in the context of greater adoption of digital payment across Europe. A recent Nielsen survey found that 69 percent of Chinese travelers used their mobile phones to make payments during overseas trips in 2018. According to the report, mobile payments accounted for 32 percent of transactions made by tourists abroad. This marks a significant shift away from cash payments, which only made up 30 percent of transactions made by Chinese tourists.
Ma Zhiyue, a 32-year-old fashion buyer from Chengdu, welcomes the opportunity to use Alipay when traveling abroad. “Alipay is commonly used in big [European] shopping malls,” Ma said. “The transactions are super-fast and convenient, and the exchange rate is friendly.” Ma added that she hopes the service will continue to be extended to more small stores and supermarkets.
Merchants are also seeing the benefits of streamlining transactions for Chinese travelers. The same Nielsen survey revealed that almost 60 percent of merchants acknowledged an increase in foot traffic and revenue after adopting Alipay. This corresponds to the report’s finding that 93 percent of Chinese tourists said they would spend more money if mobile payments were more widely available.
An example of a large retailer adopting Alipay is Spanish cosmetics brand Primor. Having taken the leap in late 2018, Primor has rolled the service out across more than 115 stores. “Since the implementation of Alipay in our Primor stores we have seen both an increase in first-time users, more brand recognition and repeat usage from existing users,” said Alain Cabessa, Administration Director at Primor, “each week we see increases in total sales.”
Although Alipay integration gives Chinese shoppers a more comfortable experience at the checkout counter, Cabessa said Primor also strives to facilitate an ease of communication between staff and customer. “We ensure our store managers have a good command of English and at specific stores we have hired Chinese speaking representatives,” Cabessa said. “This increases sales and attracts other Chinese tourists.”
Alipay Aids Ridesharing
Ridesharing is another area in which Alipay is aiding the European tourist experience for Chinese travelers. In early June, the e-payment giant debuted an unprecedented feature that allows travelers to use ride-hailing services in over 1,000 cities worldwide. The feature is available within the Alipay app’s mobility marketplace mini-program, which means travelers don’t need to download any additional app and go through the hassle of registering an account.
The integration is the result of a partnership between Alipay and Splyt Technologies, a British mobility startup. Splyt’s platform is designed to be highly user-friendly: passengers can pay in their preferred currency and Splyt provides round-the-clock customer service. An in-app chat platform also helps users and drivers to navigate language barriers smoothly.
“Consumers don’t want 100 different apps – they want tools that make their lives easier,” said Kiki Wu, Director of Business Development, Cross-Border Business, at Alipay. “This brand-new taxi hailing mini program makes it possible to search, book and pay for taxi rides in our users’ native currency. Partnering with Splyt gives us unparalleled access to a roster of transport providers across the world that will make getting around when travelling easier than ever before.”
Alipay users will initially be able to hail rides with Splyt’s transport partners in the UK, UAE and Southeast Asia, but coverage will be extended to other countries and regions throughout the summer.
With Alipay having already eased the experience of shopping and taxi hailing for Chinese travelers, it remains to be seen where the Shanghai-based company will turn its attention next, but whatever the decision European businesses that get onboard quickly are sure to benefit.
Edited by Richard Whiddington