Swiping card, flash payment, mobile wallet, cashless payment revolution constantly
Since the two giants of Alipay and wechat jointly promoted the cashless payment method, mobile payment has been integrated with people’s living habits, and is more and more popular, especially among the young generation. It has become a light fashion to go out with only mobile phones. However, in order to achieve a more convenient transaction process, the concept of cashless payment has been sprouting in China’s financial ecology for a long time, and many cashless payment methods suitable for different transaction situations have been gradually developed.
The first generation of cashless payment, the credit card era, is convenient and fashionable for users, while merchants have to pay extra commission fees to the banking system, especially for small merchants. However, it is still popular among large and medium-sized merchants, for the following reasons:
First, cash has custody risks. For large and medium-sized merchants and consumers, credit card transactions are simpler and more convenient, and safer under the protection of technology. Second, simplify settlement methods. Generally speaking, the daily flow of large and medium-sized businesses is relatively large. If the card swiping business can be partially used, it will undoubtedly reduce the workload of counting and make the bank statement flow more clear. Therefore, cash payment is not perfect for merchants, so merchants are more willing to try all kinds of non-cash payment methods.
The initial card swiping method is to use the unionPay marked bank card to swipe the POS machine to complete consumption. Users need to input the card password on the POS machine and then sign for confirmation. This payment method can collect consumption data into the UnionPay system, and use it as reference data to master people’s consumption habits, which is more conducive to merchants’ marketing. But this kind of swiping card payment method is more suitable for merchants with large customer unit price, such as large shopping malls, supermarkets, jewelry stores, etc., and it is not suitable for convenience stores with small customer unit price and small shops. In addition, it is necessary to input the card password and sign to check the card swiping, which leads to low card swiping efficiency and reduced store operation efficiency.
In view of the pain point of low efficiency of swiping cards, major banks later launched unionPay flash card. This is a contactless IC chip card, chip card loaded with electronic cash account, users do not need to enter a password, wave the card can be spent. Although a single transaction of no more than 1,000 yuan is very small, but the number of people with such chip cards is too few, and the card accounts need to go to bank branches to deposit cash in advance into electronic cash accounts, which is sometimes inconvenient. Moreover, under the traditional consumption thinking, the pass-free and visa-free payment method is not in line with the safe consumption habits of the public, so there are few customers using unionPay flash payment function, which has not been popularized.
Another widely used credit card is the city card, derived from the bus card. At first, they only took buses by swiping cards in local cities, and then gradually expanded to taxi, ferry, subway, gas, electricity and other daily expenses. This card is very convenient and popular with the public, but it also has a big limitation. For one thing, this card can only be used in one city. Second, the coverage is not wide enough, limited to the use of some scenes in life; Three to this bearer card, once lost is easy to steal brush; Fourth, merchants need to lay special reading and writing equipment, which increases the cost.
There is another payment method similar to credit card payment but with different media — mobile wallet, which is jointly developed by China Mobile and E-Bank and applies NFC technology. Users can complete payment by swiping their mobile phones on POS machines and other devices, but it has not been vigorously promoted due to the inconsistency in technical standards between China Mobile and E-Bank.
Swiping a mobile phone to complete the process of payment is also a very fashionable means of payment, but this technology also has many shortcomings: first, the mobile phone needs to implant a specific chip, but not every mobile phone has NFC mode, even though the current smartphone is very common, many mobile phones do not carry NFC payment mode; Second, this technology needs to upgrade the POS machine, which may further increase the cost of merchants and reduce the profit margin. Third, the popularization of NFC payment needs to get through the whole ecological chain of mobile phone manufacturers, POS manufacturers, operators and so on.
After swiping card, NFC and other payment methods, new Internet payment methods began to appear. In May 2003, Alibaba invested and founded Taobao.com, an e-commerce platform, which is an online trading platform for buyers and sellers. However, limited by the traditional business thinking of “hand in the money, hand in the delivery”, there is a problem of trust between the buyer and the seller. The buyer worries that the seller will not deliver the goods after payment, and the seller worries that the buyer will not pay the goods after delivery. In October of the same year, Alibaba launched the third-party payment tool “Alipay” in the mode of “guaranteed transaction”, which solved the transaction trust problem between buyers and sellers on Taobao.com.
In 2004, Alipay became independent from Taobao, expanding from only serving Taobao shopping payment to the entire Internet e-commerce payment platform, constantly improving and innovating. In July 2011, Alipay launched a mobile payment product — TWO-DIMENSIONAL code payment, and entered the offline order collection business. In 2013, wechat also launched the scanning code payment function – wechat Pay. In the competition between the two sides to expand the market, Chinese consumers ushered in the fashion craze of scanning code payment.
Alipay wechat two tiger battle, scan code payment is favored
The emergence of every new thing to let the public understanding and recognition, promotion must be a big test. Because users know little about the TWO-DIMENSIONAL code, and there are concerns about security risks, in order to promote scan code payment, it is necessary to overcome users’ anxiety about the security of scan code payment.
In August 2013, Kuaidi Taxi-hailing was connected to Alipay and became the first field of scanning code payment. In January 2014, Didi Dache supported wechat Pay. Scanning code payment has become popular, starting from the taxi scene offline, and expanding online in the fields of airline travel, games, group buying and so on. That is to say, it is the law of the popularization of scan payment to promote scan payment from high-frequency, small and popular scenarios, so that users gradually get used to the way of scan payment and then indirectly break their security concerns.
After overcoming users’ security concerns about scanning code payment, alipay and wechat Pay, two payment giants, started a battle of offline subsidies for scanning code payment. It is simple and crude but can directly hit consumers’ pain points, and it works well every time. Starting from the first – and second-tier cities with dense population and large consumer groups, gradually expand to third – and fourth-tier cities and rural areas. For example, on “Double 12”, Alipay cooperated with about 20,000 offline stores to launch a 50% discount for alipay wallet payment, and millions of payments were made on that day. Wechat also launched a cashless Day, providing a large subsidy for consumers to scan codes for payment. Alipay and wechat Pay not only provide subsidies to customers, but also to merchants. Under the tug of war between Alipay and wechat, the domestic sweep code payment ushered in a climax.
With the gradual saturation of the domestic scanning code payment market, the two payment giants will direct the spearhead abroad. In 2017, Alipay launched its Hong Kong version, Alipay HK, and wechat Pay began to promote wechat Pay to Hong Kong merchants. With the overseas travel footprint of Chinese people as the destination, expand the overseas payment market, and push the sweep code payment to the international stage.
Scanning payment is so popular because it is good for both merchants and customers. First of all, for merchants, there is no need to increase any hardware cost, no change, no signature, high efficiency. Customers can complete the payment by scanning the two-dimensional code of the business, and then launched the “reverse scan” method, the business with a scan code gun can accurately deduct money, efficiency is not a problem.
Secondly, for consumers, it saves the trouble of carrying cash, and mobile phones are in hand to buy at any time online or offline. It’s easy, it’s fast, it’s safe and it’s hip. And consumption records can be instantly viewed on the mobile phone, whether the consumption is successful, whether the consumption data is wrong.
Scanning code payment is known as “simple, fast and safe”, but the seemingly good scanning code payment has its limitations. For example, scanning code payment is still established on mobile phones, which is an electronic device. Due to technical limitations, payment cannot be completed in one step, and consumers need to perform some operations to complete the whole process.
However, it has become a fact that scanning code payment has been widely applied to all fields of life, including online shopping, offline taxi hailing, living expenses, physical store consumption, rental, medical treatment, public transportation, reservation services, etc. It has to be said that, with the promotion of third-party payment institutions such as Alipay and wechat, scanning code payment has become the mainstream payment habit in people’s life and a major representative of cashless payment.
How will cashless payments revolutionize the world?
In the process of the gradual evolution of cashless payment, after the popularity of scanning code payment, a batch of faster and more advanced cashless payment technologies are landing.
On September 1, 2017, Alipay announced that it launched a face-swiping payment service in KFC KPRO restaurant in Hangzhou Mixc, which allows users to complete payment without using their mobile phones, opening the formal commercial use of face-swiping payment. Face payment applies biometrics technology to recognize human faces. The main reasons why face payment attracts so much attention are as follows: First, face payment can be applied to the emerging business model of “nobody” to further improve the efficiency of the whole transaction process; Second, face payment is also a new way to grab the third-party payment market.
However, there are still two aspects to be improved in this mode: first, the accuracy of biometrics technology is very high, for example, the face recognition technology pioneered by the recently launched IphoneX has been found to have some technical flaws; Secondly, increasing the cost of hardware equipment in stores is not easy to be popularized for the time being, so it is particularly important to improve the popularity rate of facial payment and reduce the cost of hardware.
In addition to the face payment method, there are also companies trying to more personalized payment methods, not limited to the face but with the user’s favorite objects, such as tattoos, ears, rings, live pets, a book, etc., can be used as payment media.
In any case, from credit cards to QR codes to face swiping, we’ve become brainless fans of cashless payments when we imagine what the next cashless payment will look like and make life easier for humans.
Liu Kuang, meditation on the Internet, wechat official account: Liukuang110