Payment methods in China
There are many payment methods in China:
Alipay is the only payment system used on taobao, and that is what we consider the eBay of China. Alipay has the biggest market share in China with over 550 million members and a daily transaction volume of over 2.5 billion yuan. Many major websites use Alipay as an e–commerce payment method, such as taobao, Amazon, 360buy and AirAsia.
Considering low trust in China’s online payment system, they introduced escrow (the payment is made by the buyer before the product is shipped and the payment is released when the product is received) and immediate payment (used to pay for hotel room bookings, flight bookings or other items that do not need to be shipped) to solve the trust issue and to expand the market.
To setup on this platform as a foreign company, you need to pay $1,000 USD. Transaction fees are 2.5 – 3.0% depending on your annual transaction volume.
There is no setup fee for Chinese companies and they need only pay 0.7-1.2% as transaction fees. You can communicate with Nanjing Marketing Group for the information on setting up your account.
Alipay has arrangements with over 60 Chinese banks, Visa and Mastercard.
Paypal entered into China in 2005 and it is the most common payment method used by Chinese buyers to purchase goods from other countries. Unlike Alipay, it only provides immediate payment.
Withdrawing money from PayPal is much simpler than with Alipay.
3. 99 Bill
99 Bill is another leading online payment service provider in China, offering a comprehensive suite of secure, safe and convenient electronic payment solutions to all kinds of enterprises and individuals. As of February 2011, 99 Bill had 84 million registered users and about 830,000 merchant partners.
99 Bill has arrangements with over 30 Chinese banks, Visa and Mastercard. The setup fee is 75 USD. They charge 1% of the payment, 0.1% of withdraw. Only Chinese companies can sign up for 99Bill. They must have a website with an ICP license number.
Tenpay is the main competitor of Alipay, taking up 20% of the market share. Enveloped by Tencent Company, which owns the most popular IM in China –QQ and weixin. With more than 300 million QQ users, Tenpay allows any businesses related to QQ games, QQ numbers and other QQ services to solve the payment problem. It provides 100% free escrow and a 1% transaction fee instant payment service.
More than 200,000 shopping websites accept Tenpay. Tenpay provides an excellent payment platform to corporate users, covering B2B, B2C and C2C areas.
5. China Union Pay
Approximately 30% of cards worldwide are a China UnionPay card (CUP) and that is the only domestic bank card organization in China, linking the ATMs of 14 major banks and many smaller banks throughout mainland China. It is also an Electronic Funds Transfer at Point of Sale (EFTPOS).
With China Payment Services, international merchants do not need a physical presence in China, nor do they need a Chinese bank account.
The “push payment” principle is a different process that Westerners may not be accustomed to, whereby users are actually directed to their personal bank account to authorize the payment.
Many large international eCommerce merchants in China are choosing to offer liberal return policies for card payments, rather than provide a Cash on Delivery option, making UnionPay card payments a great China online payment method for any international merchant.
You have to contact China Payment Services to accept China UnionPay cards online.
How do consumers pay?
1. Cash on Delivery (COD)
Cash on delivery makes up the largest percentage of China online payment method preferences in China (approximately 40%). Famous websites such as Dangdang, Amazon, 360buy are conducting methods like this as one option.
There are many reasons for the preference in China towards this payment method. Firstly, goods can be quality assured by the receiver prior to payment. Secondly, if people don’t have an account for online payment (for example a senior or someone from rural area who is not really good at using a computer), they tend to choose this method. COD payment can be made by cash, certified check or money order.
2. Credit Cards (China UnionPay cards)
Online credit card usage in China is only approximately 5%, not as popular as in Western countries. International cards such as Visa and MasterCard are not common online payment methods due to the low-trust associated with them in China.
3. Debit Cards (China UnionPay cards)
Debit cards are widely used by Chinese consumers for Internet purchases. The funds paid using a debit card are transferred immediately from the bearer’s account through use of a “push payment “principle. During the online payment process, users are directed to their personal bank account where they physically log in and authorize the transaction.
Although COD makes up the largest percentage of China online payment methods, the trend towards using debit/credit cards (China UnionPay cards) is continually increasing as more domestic and international online merchants integrate the option of online card payments on their website.
Shipping methods in China
EMS and express companies
Major shipping companies in China
- 深圳顺丰速运 Shunfeng 55062 电话：4008111111 网址http://www.sf-express.com
It has built an extensive business unit covering research and development, logistics, pickup & delivery network, etc. which spans the nation (including Hong Kong, Macau, and Taiwan). At the same time, its international network has been actively expanding to South Korea, Singapore, Malaysia, Japan, and the United States.
2. 上海申通快递 83678 电话：021-39206666 网址：http://www.sto.cn
Covering Mainland China and Hong Kong, Macau and Taiwan. They are in service 365 days all year round.
3. 上海圆通速递 48442 电话：021-52273639 网址：http://www.yto.net.cn
Up to 2010, they have set up 4800 branches and have covered more than 1380 cities all over China. Now they are expanding to Hong Kong and have also opened special lines for package services to Hong Kong, Macau, the Middle East and Southeast Asia.
4. 上海天天快递 27850 电话：021-65849222 网址：http://www.ttkdex.com
They have weixin service as a method to track the package. Their business is mainly in Mainland China and Taiwan.
5. 上海韵达快运 24810 电话：021-62215588 网址：http://www.yundaex.com
Their business is mainly in Mainland China and Taiwan. For international packages, they work with DHL, UPS, TNT, EMS.
6. 上海EMS邮政特快 17658 电话：11185 网址：http://www.ems.com.cn/
Its network covers China’s 31 provinces and reaches over 200 countries and regions. The company possesses the world-acclaimed brand “EMS” and the leading domestic logistics brand “CNPL.”