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Wechatpay and tenscent


While Germans still mainly deal with old-fashioned paper Euro dollar and coin. Millions of Chinese tourists travel to Germany has demanded the merchandise to support their standard payment method back their homeland – E-wallet. More and more shops prefer to pay by mobile phone.


Munich, capital and the most populated city in Germany, the disappearance of cash has been prophesied by IT augurs for years, without much of this being felt in Germany so far. However, the revolution has long since entered the bill. In a steadily increasing number of German retailers, numbers by mobile phone have long been possible – but often not intended for German customers.

On Monday, the large-scale Chinese group, Tencent, announced on its German partner, Wirecard AG, that the chat program WeChat for Chinese tourists by mobile phone in Germany will be possible from November. Already present, Tencent is the strongest competitor Alibaba, who has rapidly expanded in Germany and took the pioneering role with the Alipay app. Quasi-hidden, Germany has been achieved by a development that, according to many experts, will have a significant impact on the global financial sector.


“In Europe, Alipay is accepted by 10,000 retailers, including over 2000 in Germany,” said Yang Xinyun, spokesman for Antib Financial in Hong Kong. These include, for example, the Rossmann drugstore chain, the chain of the very famous cook pot maker WMF in China, the Munich-based Edelkaufhaus Ludwig Beck, and the Munich airport


The target group are the Chinese


The target group is not the German, but Chinese. Wirecard, an international service provider for electronic payments, is a partner for both companies. “Chinese tourism in Germany is booming, and visitors from the Far East are always welcome to pay with their local payment method”, says Jörn Leogrande, vice-director of the Wirecard mobile business.


Many Europeans have never heard of Tencent and Alibaba; in China, the two companies have a market power comparable to Google and Amazon. Tencent estimates the number of WeChat user accounts to be 938 million. Alipay has more than 400 million users. According to a study of the United Nations published in April last year, both apps were already moving the hard-to-conceive sum of almost three trillion dollars.

Every year, double-digit millions of Chinese tourists visit Europe. And the majority is particularly interested in one thing: buying, buying, buying. Chinese tourists are said to have spent almost 300 billion dollars abroad in 2015, according to a report from the state news agency Xinhua – 76 billion in Germany.


In the eyes of many guests from the People’s Republic, Europe is mainly a gigantic shopping center; also one with low prices, whether leather handbag from France, sunglasses from Italy or German cooking pot. The average spending of a Chinese tourist in Europe is around 3000 euros according to the Wirecard estimate.


German consumers are extremely reluctant in cashless procedures


But with old-fashioned phenomena such as coin money or EC cards, especially younger Chinese are reluctant to leave. Although the online purchase with the mobile phone also spread in Germany, but not the mobile numbers at the checkout. In this respect, Germany is the developing country, which is lagging behind the advanced China.


Alipay is a pure payment app, WeChat a chat program with integrated payment option. For most Germans the development has hitherto been hidden for a simple reason: from Alipay there is no German version, the German WeChat edition lacks the payment function.


“In the case of mobile payment, we still see a great reluctance in the case of other cashless procedures with the German consumer,” says Marco Liesenjohann from the IT industry association Bitkom. “The development of mobile payment depends on a change in the consumer’s behavior.” And this process will be decisively determined by how much the smartphone is understood as a universal tool in everyday life – and thus also as a means of choice for payment, says Liesenjohann.


The importance of the development goes far beyond the German retail sector. “The gigantic Chinese technology companies, equipped with an abundance of money and IT infrastructure, have broad global ambitions,” the EY 2016 Business Consultants wrote in a study on Chinese financial technology (fin-tech).


Alibaba and Tencent are strikingly pushing into non-Chinese markets: “At present, we are more focused on providing financial services in developing countries,” says Yang’s financial spokesman, Yang. However, the company is open to possible cooperation with European partners. Alipay is currently expanding on a global scale; Including in the USA, Indonesia, the Philippines, South Korea, Brazil and Russia. And where Alipay goes, Tencent is not far.


Patrick Goh Mr. Patrick Goh B.S is a research engineer with more than 10 years in industry of IT, Engineering and Financial market experience. In 2013, he joined financial institute’s research team as R&D software engineer mainly researching on technical analysis, inter-market correlation and fundamental factor in leveraged trading instrument using machine learning technique and programming algorithmic trading strategy by quantifying trader sentiment behind the price movement.


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