First Published on 3rd November, 2017
Ai Editorial: Specialists point out that if a merchant isn’t being able to accept payments via WeChat Pay and Alipay then the acquirer needs to be questioned, ensure they explain any barriers and how to fix the issue, writes Ai’s Ritesh Gupta
Is accepting payments via Alipay or WeChat Pay a smooth process?
Irrespective of the answer, it is imperative for any travel e-commerce player focused on Chinese travellers to come to grips with payment processing as far as Alipay or WeChat Pay are concerned. The adoption of e-wallets/ mobile wallets in China is being driven by the ubiquity of indigenous Internet giants – Alibaba (Operated by Ant Financial Services Group, Alipay currently has over 520 million active users) and Tencent (combined monthly active users of Weixin and WeChat app is already over 965 million). Merchants across the globe are looking at in-app web-based payment, QR Code payment, in-app payment and payment at a particular location, say onboard aircraft or at the airport.
Is it really tough or just wrong notion?
“Payment is quite wide and diverse (in the Asia Pacific region). And China is indeed a unique market in the whole of Asia. It’s almost that you can think of China as one area, and can segregate it from the rest,” Trevor Spinks, Head of Sales and Distribution, Scoot-Tigerair mentioned during one of our conferences in Singapore.
“Scoot flies to 18 destinations in China, and that’s a significant part of our network. We will be offering WeChat as a payment option soon. The complexity for WeChat pay is huge. It doesn’t use normal software language. WeChat Pay have their own language. So one needs to work with WeChat or 3rd party experts,” says Spinks. It is important as a massive chunk of population uses WeChat. “So it is about using what they use every day to fly Scoot. But, yes, China has very requirements, and different rules and regulations.”
Referring to a diverse region such as the Asia Pacific, Spinks mentioned that in terms of how an airline manages and works around a variety of options to pay in this region, consider an airline which flies to 10 countries and each country has 5 forms of payments. “And if all forms of payments are different from all the other markets, then there would be 50 forms of payments. You do need payment providers and acquirers. We work with a global specialist. They are already working with a number of payment distribution capabilities in several countries, and when airlines reach a certain point, they can work with one specialist and this allows an airline to straightaway tick, say 30 out of 50 payment methods, at one go. At times, there is a need to work directly with 3rd party suppliers. WeChat is a great example. We might have to work directly with WeChat to work it out for us. So it is a very diverse and hard area to manage. There is a need for a dedicated person within the airline to look after this. Also, you need expertise within each of the market to understand, whether say is 7-Eleven convenience store a viable option or is the popularity decreasing and in two years time no one would be interested in paying via this option. So then no point in investing in that payment method,” explained Spinks.
As a specialist in this arena, Chargebacks911’s COO, Monica Eaton-Cardone says, Alipay and WeChat have authorized partners, and these entities specialise in managing cross border payments and dependent on your geographic location there are several options to provide partnership.
“Alipay works with a variety of financial institutions including MasterCard and Visa. Outside of China, WeChat will only accept credit cards to link to the account. As an e-commerce entity if you are already have the functionality to deal with cross border payments through other payment rails then you have the knowledge and experience to deal with WeChat and Alipay,” she said. “E-commerce companies already have numerous rails to accept payments. Accepting payments via WeChat and Alipay would not be challenging anymore than your existing network of payment channels. If you deal with Paypal you can deal Alipay and WeChat Pay. If payment isn’t accepted then your acquirer needs to be questioned, ensure they explain any barriers and how to fix the issue. Both Alipay and WeChat are a form of e-wallet which are funded via a variety of payment options including international payment/ credit cards as well as Chinese domestic bank cards/ accounts.”
Issue of fraud
Spinks mentioned that fraud becomes a bigger problem, bigger the airline becomes.
“So when we were small, we weren’t worried about fraud, we had relatively bigger issues (to sort). But now we have around 40 aircraft, and flying to 18 different countries, fraud can be a big “number” annually. So a partner such as Adyen or Worldpay can also help with fraud solutions. But what you need here and what generally falls under the finance department, you need people would be measuring and tracking fraud. So if one country had a fraud value of 1% and the norm is 3%, then its fine. And another one had a value of 10%, so there are significant issues in that country and you have got to measure it. And the onus also lies on the 3rd party partner to sort it out. And of course, fraudsters also find new way of cracking the system, so it is always a cat and mouse game,” he said.
Referring specifically to Alipay and WeChat Pay, Eaton-Cardone said as with any platform the prospect of fraud is real.
She said fraudsters target new payment channels or newly implemented processes as they are easier to exploit and find weaknesses until you plug the holes.
“However with effective fraud monitoring this can be managed. Review of transactions and fraudulent behaviors using reporting tools, analytics of customer spending, how transactions were initiated, time of day which device was used, analysis of chargebacks will all help mitigate fraud issues. If monitoring is done at every available stage you will manage fraud issues. This is where we come in as we can help provide these skills and products to help,” she said.
Eaton-Cardone also mentioned that if there is an effective fraud monitoring process in place, then the ecosystem, say Alipay or any other, wouldn’t matter as one can apply this to wherever the payments are being generated. “When reviewing mobile transactions check your order data: What was the device used? Was a mobile phone number provided? Is there a GPS location? Does the GPS location it differ than the shipping/billing address? Don't rely on IP geolocation. Review the time of usage, tablets tend to be used more in the evening and with higher spends. Know your customer, review their typical spending pattern? Do they have a history of denying transactions.”
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