Mathias Michelangeli, Senior business developer at Limonetik, explains to payment terminals and in-store why and how mobile payment is a key to attract a new hyper-connected clientele
According to Gartner in The Market Guide for Digital Commerce Payments in July 2019, providing a smooth payment experience increases conversion rates and provides an undeniable competitive advantage”— Mathias Michelangeli, Senior Business Developer, Limonetik
China has expanded into mobile payment faster than any other country in the world. And Chinese tourists stick to their habits when they travel. In 2019 “69% [of Chinese tourists] used mobile payment (mainly Alipay and WeChat Pay) while shopping abroad – 4% more than the previous year”. Merchants outside the Middle Kingdom therefore have a strong incentive to offer this payment method. The main challenge is to entice Chinese tourists, create a competitive advantage, provide a tool to attract new customers who use mobile payment, reduce waiting time at checkout, provide omni-channel shopping, and improve the customer experience.
In recent years, the travel habits of Chinese tourists have changed considerably. Clearly, they travel less in groups and visit a fewer countries per trip ( around four, including France, Italy and Switzerland). The result of this behavioural change is twofold: there are a growing number of individual travellers who prefer theme trips and an increase in “repeaters”, that is, tourists who follow the trends started by influencers. This hyper-connected customer base is, in fact, rooted in so-called e-tourism or “M-tourism”.
From M-tourism to M-payment
Ardent users of technology, these consumers have become “prosumers” – consumers who produce information, in this case, related to tourism. They express, exchange, and share their opinions on their smartphones over the social media, replacing the traditional not-very-interactive tour guides with smart devices, which have conversational capability.
Chinese tourists also prefer to make purchases using their smartphones. Many consider travelling with cash as impractical, not to mention unsafe. They prefer paying by mobile phone, which is more convenient and secure. In Nielsen’s 2019 study, “New Trends for Mobile Payment in Chinese Outbound Tourism”, when asked what criteria influenced their shopping habits abroad, Chinese tourists rated payment method at 37%, ahead of product quality (36%) and price (36%). In the same study, “89% of Chinese tourists said they would make more purchases if more merchants offered mobile payment solutions”.
Some merchants have incorporated these findings into their sales strategy. They are implementing solutions designed to satisfy consumers who are passionate about technology and maintaining their independence. McDonald’s, for example, has installed self-service kiosks for customers to order meals. Menus are translated into the local language and visual content is tailored to the culture of each country. This strategy solves the problem of the language barrier with staff, simplifies ordering and payment procedures, and increases the accuracy and efficiency of service. At airports, kiosks have been set up to facilitate VAT refunds, thereby reducing waiting time at the counter. Another example is IPM, a business that provides interactive terminals called Easykiosks that can deliver public transport passes or SIM cards. The IPM system drastically reduces waiting time at checkout and improves the customer’s shopping experience. In the not-so-distant future, kiosks and terminals will all be offering new international payment methods through mobile payment. Actually, the future is already here.
Digital marketing boosts mobile payment
By leveraging the power of digital marketing and the blend of media and interactive channels, merchants can increase their visibility and improve their sales tenfold. By informing Chinese tourists about promotions, discounts or coupons before they travel, merchants can spark the interest of new customers and draw them into their stores. The ideal strategy would be to create a buzz through digital marketing on Chinese mobile payment platforms, like Alipay, WeChat Pay, and Tencent, and establish a relationship of trust between the brand and the consumer. Through its geolocation service, Alipay, for instance, tells users about nearby merchants, promotional offers and product news.
Alipay and WeChatPay have also launched mini-programs that are comparable to resident applications. Users don’t need to download new applications because they are already integrated into platforms. These mini-programs handle everything from e-commerce to accessing Chinese government services.
For example, at Hong Kong International Airport, a mini-program allows customers to shop duty-free online, before arriving at the airport, and then pick up their purchases 90 minutes after ordering.
Customers can also use these mini-programs to order food for home delivery. Standard restaurant chain apps could eventually become redundant, as WeChat and Alipay have managed to bring the two together within their platforms. These mini-programs could become serious competitors to the conventional e-stores.
Mobile payment added to the value chain for a seamless customer experience
According to analysts at Gartner in The Market Guide for Digital Commerce Payments published in July 2019, providing a smooth payment experience increases conversion rates and provides an undeniable competitive advantage. To be sure, for outlets and stores to benefit from the sales potential from Chinese tourism, they must now offer omnichannel experiences including mobile payment – the payment method of choice for these customers – and target marketing campaigns accordingly.
With an incentive to appeal not only to Chinese tourists but others worldwide, the merchant network that accepts payments via QR code, NFC technologies, and electronic wallets is expanding. This trend will also lead stores to digitise their customer journey. Besides Alipay and WeChat Pay, other smart media platforms such as France’s Lydia and Denmark’s MobilePay are now starting to offer all types of payment method.
Senior Business Developer, Mathias Michelangeli joined Limonetik two years ago to open up and develop the new payment terminal market. With his expertise in acquisition and market development, Mathias has applied his talents as an independent consultant; as Sales Director at Linkfluence; Business Development Manager at Teemeo; and partner at Streamcairn. A graduate of the National Conservatory of Arts and Crafts (Arts et Métiers) in Paris, he also holds a French Degree (DTA) in Sales of Products and Services.