According to iResearch report on China mobile payment user behavior in 2013, in the aspects of mobile payment recognition, only 20.7% of Chinese users knew nothing about mobile payment. Over 70% of users had a certain knowledge of mobile payment. At the same time, 71.2% of users haven’t used mobile payment before, frequently users only accounted for 6.3%.

This high recognition and low usage rate was in accordance with mobile payment growing stage in China market, with mobile internet development and consumer habits changing, mobile payment would enter its fast developing stage. China mobile netizen’s recognition for mobile payment would keep growing, and mobile payment usage rate would increase largely.

Data showed that 17.3% of consumers used mobile payment 1-2 times per month, nearly 8% of consumers used it 3-6 times per month. While only 0.9% used more than 10 times per month. Mobile payment usage low frequency was because offline shopping remained the dominance, though online shopping grew fast in certain user groups.

71.7% of respondents would use mobile payment for phone bill and recharges. 33.9% said they would use mobile payment for daily shopping and 31.5% in tickets booking. Phone bill and recharges were related to mobile, therefore it’s natural for consumers to use mobile payment. Chinese netizen’s shopping habits hadn’t transferred from PC end to mobile end, mobile payment could not replace PC end payment methods in daily shopping and tickets booking. NFC payment would increase consumers’ device update cost, so it was not popular.

29.4% of China mobile netizen were willing to pay for 101-300 yuan (USD 16.52 to 49.06) in a single transaction, 39.1% would pay for over 300 yuan (USD 49.06). Mobile payment users were mainly young people, their incoming limited their spending. Besides, most mobile payment transactions were phone bills and recharges. Considering the money security, most users dared not to invest a large sum in mobile end.

85.9% of users would choose third-party payment enterprises, banks were their second option. Third-party payment enterprises had built up large user base in PC end, their mobile end payment attracted their PC end users and attained user loyalty. Similarly, banks launched their mobile apps one after another, and its penetration rate improved for its credibility and security. China telecom enterprises’ market reactions were too slow and their products were replaceable.

Data showed that convenience, efficiency and security were the top three reasons why consumers chose payment enterprises. Alipay and ICBC bank had accumulated many years of experience and formed competitive advantages.

Chinese mobile netizen had the highest acceptance for mobile payment app/website and SMS payment. The differences between acceptability and usage rate in QR code payment, NFC payment and mobile POS payment were quite big. Consumers had accepted and used mobile payment app/website and SMS payment, as for QR code payment, NFC payment and mobile POS payment, they were not popular yet therefore their acceptability and usage rate were both very low.

60.7% of mobile netizen had heard about Wechat payment, and 69.8% said they basically accept Wechat payment while 11.4% wouldn’t accept it. The launch of Wechat 5.0 gained wide recognition of Wechat payment, what’s more, Wechat had a large registered user base and it’s easier for Wechat payment to be accepted.

52.9% of mobile netizen believed Wechat payment would have a very promising future, while 5.8% didn’t agree. Still, about 40% hold wait and see relatively conservative attitude, because the benefits of Wechat payment still needed to be proved.

The difference of mobile payment was its convenience, 62% of mobile netizen used mobile payment for its convenience. However, users different recognition for mobile payment security may cause by diversed individual experience.

60.2% of Chinese mobile netizen regarded mobile payment safe, only 31.5% and 2.8% thought mobile payment “not so safe ” and “not safe”. Even among users who hadn’t use mobile payment before, half of them thought mobile payment was safe.

Mobile payment security recognition was due to technology and law protection, also due to user experience. With technology and law improvement, mobile payment security gained wide recognition. Still, occasionally, there were security loopholes which led to part of users felt unsafe.

Top two risks in mobile payment were money safety risk and personal information leak risk. These were the most urgent needs of mobile users and the most difficult problems to solve.

78.1% of mobile netizen expected to improve mobile payment security. Users had greater demands to satisfy their personal interests than improving mobile payment itself. Security became the crucial part of mobile payment user experience.

30.9% of mobile netizen were optimistic that mobile payment would be the main payment method in the future, while 64.4% of users were more reserved. 64% said they would use mobile payment, only 2.5% said they would not use.

Mobile payment grew more popular as mobile internet and m-commerce developed, but mobile users needed to be guided and their using habits needed to be cultivated.

Tencent launched its Wechat membership card version X1 on September 24, 2013. It aimed at achieving 1 billion yuan (USD 162.9 million) monthly transaction.

Wechat Membership Card

Tencent launched its Wechat membership card in September 2012, which is a Tencent m-commerce O2O product to connect consumers with businesses. The new version X1 added new features based on the previous version, such as mobile CRM, customized menu, mobile customer service, Wechat payment and mobile QQ coupon store. This provides enterprises an entire consumer information management system.

Tencent offered enterprises a mobile and social network user accounts management system, which would be a huge convenience for those who don’t have IT support to be able to perform precise social marketing and customer service. They could fully dig up potential consuming in existed users without lowering profit.

Up to now, more than 1000 brands have signed up with Wechat membership card in over 30 cities. It has issued more than 50 million cards with about 30 million users. It is estimated to achieve 80 million users in 40 cities by the end of 2013. Actually, the short-term goal of Wechat membership card is to realize 1 billion yuan (USD 162.9 million) monthly transaction.

Consumer Information Management

For enterprises, the common way of promotion is to display ads and coupons on internet and attract consumers to your shop. But they didn’t record consumers information, thus the IT department couldn’t analyze which group of consumers got the coupons.

However, Wechat membership card can record the consumption information of users, even how often they consume in the shop and the amount of money they spend. This allows enterprises to know consumers’ habit more precisely and they could send out the coupons efficiently.

O2O Market

Wechat membership card is competing with group buying and review websites. One enterprise which signed up with Wechat membership card admitted that they actually cut the promotion expenses on group buying websites. “Although advertising on group buying websites could bring short-term growth, but after the discount season, most consumers would not come back. Besides, the huge discount would also affect profit.”

The booming of group buying websites cultivate O2O market, Wechat membership card comes to harvest. Catering is only the first stop for Wechat membership card, next, it will include KTV and shopping malls.

Yixun.com, an online shopping website acquired by Tencent, granted payment access from Wechat in the middle of August 2013. Data showed that in the second half of August, after Yixun.com granted access from Wechat both in PC and mobile devices, the number of total accumulated transactions from Wechat hits 30,000.

By the end of August 31 2013, the number of average daily transactions from Wechat was more than 1,600. 60% were from mobile devices, with average 150 yuan (USD 24.3) per transaction. On August 31, transactions reached 3,000 a day, 500% more than the middle of August. Besides, Yixun mobile app new users reached 400,000.

Wechat’s access to Yixun.com was an important move for Tencent e-commerce mobilization.

Although Wechat offered an open platform for m-commerce, but the shopping business model is yet to be mature and tested.

A latest data released by China  E-commerce Research Center showed that, in the first half of 2013, online shopping turnover totalled 754.2 billion yuan (USD 123.2 billion), with a YoY growth of 47.3%. It represented 6.8% of total consumer goods retail sales.

The online shopping market is estimated to reach 1.74 trillion yuan (USD 278.4 billion) this year. And, m-commerce  turnover is about to reach 130 billion yuan (USD 20.8 billion) this year.