Many are now familiar with WeChat and Alipay, although their primary constituencies are mainland China users. WeChat is a product from the giant tech firm Tencent corporation (based in Shenzhen) and Alipay comes from Ant Financial, a spinoff from Alibaba (essentially China’s Amazon). Both are multi-purpose phone apps that include P2P transfers and POS payments, among other things. The Unionpay announcement about the Mobile QuickPass app is certainly an attempt to gain relevancy for the banks, and provide a counter to the unbiquitous fintech providers in China, which leads the world in mobile social app usage and innovation.
In a way it is similar in strategic purpose to the recently launched Zelle in the U.S., in that it allows for real-time P2P transfers, but goes a step further by creating a centralized single app to access various financial services, not just transfers. The interesting thing is that it receives endorsement from the central bank (PBOC) since in effect UnionPay was created by the PBOC in 2002 (state-sanctioned) and effectively retains a monopoly in card processing.
Fan Yifei, deputy governor, People’s Bank of China, says: “This jointly launched mobile payment app adopts unified portal standards in user identification and user experiences. It is a significant measure in enhancing financial innovation and promoting seamless retail payments for customers.”
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group
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