Online survey: Payment methods are increasing in variety in China
With rapidly increasing popularity of e-commerce and online shopping market in China, payment methods are becoming more diverse. Traditionally, Chinese customers prefer Cash on Delivery or COD method, which allows controlling the quality of a product before payment is made. Credit cards are not popular among Chinese online shoppers, while Debit cards are increasing in popularity. Of online payment methods, Alipay is the most widely used in China and accounts for around 50% of online payment market according to online survey in China.
What is the most common payment method in China?
As it was mentioned before, Chinese customers are still more traditional and, according to online survey, pay 40% of online orders by cash. This allows them controlling the quality of a good thus encouraging a company to sell only high-quality products. However, a trend towards using a debit card is clearly observed due to a large number of international companies entering Chinese e-commerce market. The security, as in case with China UnionPay system, is higher. As a result, when a customer makes online purchase, he needs to physically log into online banking and authorize the payment. On the contrary, only 5% of customers in Chine use a credit card due to low trust in this online payment method.
Alipay is by far a leader of online payment in China
It is observed that online payments are increasing in popularity among Chinese customers. This leads to the creation of numerous ways of online payment including UnionPay, which was mentioned before. It is supposed to be one of the market leaders accounting for over 11% of market share in accordance to online survey in China. Among some other patient methods popular, including Tenpay, 99 Bill, China PnR, Yee Pay, Huanxun IPS, Alipay is the most loved payment method in China. Alipay was initially introduced by Alibaba group and now widely accepted by famous Chinese online stores such as Tmall and Taobao. The method itself is extremely convenient and safe for both a buyer and a seller. When a customer makes a purchase in online shop, where its account details are stored, Alipay informs a seller that a purchase is made. At these stage money are neither on buyers account nor on sellers account, but somewhere in between. Right after a buyer confirms that an order is received, money is transferred directly to sellers account. To avoid fraud, which can occur if a buyer deliberately does not confirm that an orders is received (but it actually is), the system waits for 7 days and transfer money automatically to a seller. This payment method insure safety and convenience for the user.
To conclude, China is developing extremely fast nowadays integrating into international commerce where online payment methods play a crucial role. While COD is almost not used in European countries as a payment method, in China, online survey shows that it accounts for 40% of all purchases. This might be explained by high quality standards and requirements, which are still not completely developed in China. This makes Chinese customers become cautious about online purchases. However, online payment method tends to gradually increase in popularity for the last few years due to China’s integration into international trade. This leads to emerging of various online payment methods among those Alipay is most loved and used by Chinese online customers.
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