Mobile payment apps like Alipay and WeChat Pay are a great way to attract Chinese customers, but they can also help your business save money. Merchants accepting credit cards have to pay various fees that end up eating at their profits. Let’s take a look at three ways mobile payment solutions can reduce costs for businesses:
No handling and processing fees:
Credit card payment involves substantial fees collected by banks and credit card companies, as part of a complex transaction ecosystem. According to The Nilson Report, fees paid by U.S. merchants in 2018 to accept credit, debit or prepaid cards amounted to $107.78 billion! Mobile payment solutions like Alipay and WeChat Pay are very straightforward—with Chinese customers transferring money directly from their bank accounts into their e-wallets using these apps—which eliminates the need to deal with banks and credit card companies.
No terminal fees:
Buying or renting a credit card terminal is another expense that businesses have to consider, with an additional brand fee going to credit card companies. Alipay and WeChat Pay are app-based for customers and businesses, and don’t require a card reader. Business owners only need a smartphone and a secure Wi-Fi connection to process transactions, making mobile payment an easier and cost-effective solution.
No reward program fees:
Some of the biggest perks offered by banks are credit card reward programs. Consumers love getting reward points for airline miles, hotel rooms or cash back, but the cost of providing these rewards is charged directly to merchants. Businesses accepting Alipay and WeChat Pay don’t incur these kinds of costs. Instead, they take advantage of these platforms’ tailored marketing initiatives to reach millions of users and build loyalty programs, offering a much better ROI.
If you are a business targeting Chinese customers—particularly a small business with limited infrastructure or technical support—accepting mobile payment solutions is less expensive than credit cards. You’ll be able to offer Chinese shoppers the cashless payment methods they’re used to at home, while keeping costs down.
Let OTT Pay guide you through the process. Contact us here to get started.