“I don’t use that payment system, there are too many options. I am just limiting myself to three,“ said the daughter-in-law of a well-known US cash and treasury management consultant, who thought she was being very sensible. That comment sums up the problem for corporates: “Which payment systems do we accept and where?” No longer at the point of sale is it automatic that we just accept the big three: Visa, MasterCard and Amex because:

• largest card systrem is now UnionPay
• local cards, although declining, are still important
• electronic wallet payment schemes, e.g. Apple Pay, are gaining market share.
• the options are growing each week.

The dynamics of the choice of which payment systems to use/accept remain all the number of options has grown enormously.

Adyen adds WeChat Pay

Last week Adyen, the world’s leading multi-choice payments platform, rolled out WeChat Pay, one of the most popular mobile payment apps in China, allowing Adyen merchants to offer WeChat Pay on their point-of-sale terminals worldwide. (Since 2016, consumers have been able to buy goods online using WeChat Pay through the Adyen platform.) WeChat has 1.3 billion users, 400 million of whom use WeChat Pay for either paying friends (P2P payments) or purchasing a product.

The addition of WeChat Pay means that Adyen merchants can now accept payments from China’s three largest payment providers: Alibaba’s Alipay, WeChat Pay and China UnionPay (UPI), which is important because:

• Chinese consumers crave luxury goods – Chinese consumers are responsible for up to half of all luxury brand sales worldwide, according to a McKinsey report, and is expected to equate to $85.76 billion in 2017.
• Chinese consumers are global shoppers – by 2022, Forrester predicts that cross-border e-commerce could increase by 20 percent, reaching $630 billion, with China leading the boom.  

Dan Blumen, co-founder of Treasury Alliance Group, in his WEBchat on Payment Systems Strategy, explained that the first question in reviewing new payment systems should be: “Do we get increased sales?”

Multi-channel payment provider risks

There is mounting evidence that for a corporate the cost of setting and up and complying with each new system costs $10ks, and can be over $100k. The use of omni-channel payment providers requires just one connection interface to be able to send to and/or collect payments from many systems world-wide. But Dan Blumen, raises key concerns about using such omni-channel payment systems:

• It is a black box and I don’t know what is going on inside the box and who is responsoble for what?
• What happens when something goes wrong?
• Why would companies outsource significant amounts of functionality to a black box they don’t understand? 

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CTMfile take: The answer to both questions is no: you cannot ignore the new business opportunities from omni-channel payment solutions, and nor ignore accepting the Chinese payment systems. It is all a matter of balance and understanding eactly what is happening to the payment/collection flows.