Retail in Asia

In Trends

The incredibly brilliant way people are now paying for things in Asia

When Apple first rolled out Apple Pay in 2014, it was billed as a simpler way to buy goods and services. You take your phone out, tap it to the credit card reader, and off you go. Seems convenient, right?

But some consumers in Asia think there’s an even better way to pay.

In recent years, millions of people have grown accustomed to using messaging apps to communicate. Some of these apps now support person-to-person digital cash transfers. So the next step is pretty logical: Asian retailers have begun using these same messaging platforms to sell everything from clothing to hamburgers to train tickets. And as a consumer, you never have to leave the app to pay.

On the surface, this alternative sounds a lot like Apple Pay (or Samsung Pay, or Android Pay, etc.). But conducting real-life and online transactions through messaging apps stands to change retail like none of these other services have. What we’re seeing in Asia is the rise of mobile payments that run primarily on software, not hardware as we’ve tried to implement here in the United States. And that simple distinction may be the key to everything from accelerating the spread of mobile payments to unlocking deep, digital interactions with customers in brick-and-mortar stores to democratizing e-commerce away from giant online businesses like Amazon.

Before we get much further, here’s how the technology works. Mary Meeker, an influential partner at the venture capital firm Kleiner Perkins Caulfield and Byers, released her annual analysis of Internet trends Wednesday. In the report, she shows the technology in action with this slide demonstrating how China’s WeChat app can be used at McDonald’s.

To buy a meal with WeChat, which in China goes by the name Weixin, customers simply pull up a QR code in the app that’s connected to their credit card or other financial account. Once the cashier scans the code, that’s it — no further action is needed. Retailers in China will typically offer discounts to WeChat users as an incentive to pay with the app.

It doesn’t sound like many retailers support this technology yet, judging by blogger Stephen Millward’s firsthand tests. But it’s still early, and WeChat’s parent company, Tencent, says users have already linked more than 300 million credit or debit cards to the payment platform. Many of these people are probably waiting for the chance to start using this payment method in a more meaningful way — and if not, they’re at least potential adopters who could be convinced.