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China's digital wallets: Impact on European retail


Despite new regulations on China’s mobile payment industry, the trend continues unabated. How can European retailers meet Chinese customers’ payment expectations?

With Chinese consumers now using their smartphones to pay for everything from groceries to taxi fares, the digital wallet remains king as China continues its transformation into a cashless society.

Historically, digital payment providers’ astronomical growth was fuelled by relative autonomy, but China’s central bank has recently imposed tighter regulations, taking more control over how these providers manage user deposits and payment methods.

The most notable impact of these new regulations for Chinese retailers will be the limits set on how much consumers can spend daily using scan-and-go QR-code-based payments. From April 2018 and based on user credentials, limits on these transactions will be set at ¥500 (€65*), ¥1,000 (€129*) or ¥5,000 (€646*) per day.

The good news for European merchants is that these new limitations are currently applicable only to retailers and stores based in China, meaning that European stores can still offer their Chinese customers QR-code payment options for big-ticket luxury items.

Digital life thrives

While these new regulations may cool the explosive growth of China’s mobile payment industry, worth a reported $5.5 trillion a year, the trend is unlikely to abate.

The popularity of mobile pay in China comes from a strong base of smartphone users; over half of China’s population now uses the internet on a mobile device. WeChat Pay, owned by Tencent, has over 800 million active users per month and Alipay, owned by Alibaba affiliate Ant Financial Services, has 520 million registered users, according to its international website.

China has also permitted traditional banks to join the digital payment movement by allowing them to accept QR-code scanning to process mobile payments.

Meeting technological expectations

For merchants looking to attract Chinese customers, the provision of smart and comprehensive digital payment solutions remains imperative.

To help facilitate this, Global Blue has recently invested in digital multi-payment platform provider EuroPass, which allows affiliated merchants across Europe to accept the full suite of Chinese mobile payment methods, including WeChat Pay, Alipay and UnionPay mobile solutions and offers unique ‘drive-to-store’ digital marketing products through the WeChat social platform.

Global Blue has also launched a number of innovations to its Fast Refund service to help affiliated merchants better meet digital expectations during the Tax Free Shopping journey. Chinese globe shoppers can now choose to receive their VAT refund directly into their Alipay digital wallet at airports and stores across Europe. In January 2018, refunds via WeChat Pay were also introduced at Madrid airport, with plans to grow this offering in additional airports and stores throughout 2018.

Fast Refund is unaffected by the new limitations imposed on Chinese mobile payment.


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