.svg)
Responding to a State Council directive, Chinese regulators have begun publishing official payment services guides for foreigners, but are the recommended solutions ready for prime time?
Last week, the Payment and Clearing Association of China (PCAC) published an illustrated guide designed to help foreigners prepare themselves for China’s payments landscape upon arrival.
The People’s Bank of China (PBOC) also published a similar guide for travellers arriving via Shanghai and a guide for foreigners who with to use the e-CNY, China's central bank digital currency (CBDC).
The three guides guides follow the publication of a State Council directive on March 1, which urged China’s payments industry to do more to accommodate foreign visitors.
As covered by Vixio, the State Council (China’s Cabinet) highlighted that acceptance of foreigners’ preferred means of payment — debit and credit cards — is extremely limited in China, particularly among smaller merchants.
Likewise, cash use in China has declined to the point where many merchants refuse to accept it, even though they are technically required to do so under Chinese law.
Lack of access to and acceptance of cash is a key financial inclusion issue facing both foreign visitors and elderly people in China, the regulator noted.
PCAC’s recommendations
In the State Council’s directive, increasing the quantity and quality of card terminals among Chinese merchants was listed as an objective for the industry.
However, using card terminals for contactless or chip and PIN transactions was not seen as the ideal solution for foreign visitors.
Instead, the State Council and other regulators have pinned their hopes on adapting China’s mobile payments apps so that foreign users can "pay like a local".
In PCAC’s guide, the association therefore recommends that foreigners download either Alipay or WeChat and bind an international credit or debit card to their account.
If the card binding is successful, this allows foreigners to pay by card anywhere that Alipay or WeChat Pay QR code payments are accepted (both online and offline), which is virtually everywhere in China.
PCAC also noted that transaction limits for foreigners have been raised as a result of the State Council’s directive: from $1,000 to $5,000 per transaction and from $10,000 to $50,000 on an annual cumulative basis.
In a statement shared with Vixio after the directive was published, Alipay said it has already raised its transaction limits for foreigners to align with those of the State Council.
Teething problems with Alipay, WeChat Pay
Although binding international cards to Alipay and WeChat is the recommended solution for foreigners in China, these solutions are still in their infancy and appear to be experiencing teething problems.
As covered by Vixio, both Alipay and WeChat launched these new features last summer, coinciding with the World Economic Forum (WEF) meeting in Tianjin, China.
Both services are therefore less than a year old, and have gotten off to rocky starts, based on the experience of several users who spoke with Vixio.
Zennon Kapron, founder and director of payments consultancy Kapronasia, said that when he visited Shanghai in June 2023, he was unable to bind some of his cards to Alipay (using both Visa and Mastercard).
For example, a US card issued by Citi failed to bind, but another US card issued by Chase was successful.
Returning to China on a trip to Beijing this year, however, Kapron said that card binding worked as intended.
Delphine Chen, payments and crypto-asset consultant at Cosegic, said she had used Alipay’s international card feature last summer shortly after it was launched.
“To open my Alipay account was easy,” she said. “However, I had trouble linking my foreign debit card to the Alipay account to make payments.
“After waiting two or three days, I managed to link it and I was able to use it.”
Once the card was ready, Chen said the payment experience was “seamless” and she never had a transaction fail.
Kapron also said he did not experience failed transactions, but Jetlag Warriors, a popular travel YouTube travel duo, reported a failure rate of around 50 percent.
Vixio contacted Ant Group, parent company of Alipay, for comment on Jetlag Warriors’ experience, but did not receive a reply.
Lastly, Borna Novak, co-founder and CTO of Field39, a Croatian payments firm, said that in October last year, he had tried to set up an international card on WeChat, but was unable to do so.
“Card binding was problematic,” he told Vixio. “It was buggy, and every time it bugs out you had to start from the beginning, entering a bunch of data again and again.”
Both Ant Group and Tencent, parent company of WeChat, will be focused on stabilising and ensuring consistency in the user experience for foreign cardholders over the coming months.
With China’s economy struggling and tourist arrivals still below pre-pandemic levels, enticing foreigners to return to the country and spend freely is a priority for regulators, as noted in the State Council directive.
