What are the most popular Chinese payment methods?

Last updated on April 29, 2024

China is unique in how it evolved from a primarily cash-based economy to an economy dominated by digital, mobile phone payments. Unlike in the United States and Europe, where cash and cheques were gradually replaced by debit and credit cards, followed decades later by mobile payments (which still haven’t surpassed cards), most Chinese consumers leapt from cash straight to mobile payments, skipping over cards altogether.

The country’s rapid economic growth during the 2000s and its role as a hub for mobile phone manufacturing transformed the payment landscape quickly. It went from a mostly cash-based ecosystem to one dominated by sophisticated and user-friendly mobile payment apps.

China is also unique in the way its digital wallets are intrinsically linked with social networking and e-commerce. Having been founded by the world’s largest online shopping website and messaging app, respectively, Alipay and WeChat Pay are far more integrated into the daily lives of Chinese consumers than their counterparts in other countries. This integration has driven the enormous success of these companies and established them as an indispensable tool for people across China. 

Good to know:

  • China is primarily a cashless and cardless economy, with the vast majority of shoppers using their phones (digital wallets) to pay for items in person and online.
  • Digital wallets WeChat Pay and Alipay are China’s two most popular payment methods, accounting for more than 90 per cent of the mobile payments market.
  • UnionPay is the only card scheme in China, it issues debit and credit cards, links all ATMs in the country, provides merchants with EPOS (electronic points of sale) machines, and offers online and mobile payment services.
  • QR codes play an important role in the Chinese payments landscape as the primary method for initiating the transaction process.
  • The only way for merchants outside of China to take full advantage of the Chinese market is to integrate China’s unique payment methods into their payment systems. 

What are the most popular Chinese payment methods?

Digital wallets are far and away the most dominant payment method in China, adopted by nearly 88 per cent of the Chinese population. Although the mobile payments ecosystem is widespread, stretching from rural market stalls to urban shopping centres, it is not diverse. The vast majority of payments come from just two companies, Alipay or WeChat pay, with banking services provider UnionPay coming in at a very distance third place.

1. Alipay

China’s most popular payment method, Alipay is a mobile and online payment platform that provides a suite of payment and payment-related services to consumers and merchants across China. It was established by the Alibaba Group in 2004, which is best known for its popular e-commerce site, one of the largest retailers in the world.

Alipay isn’t just China’s most widely used mobile payment platform; it’s also the largest mobile payment platform worldwide, surpassing PayPal in 2013. Alipay users link their bank accounts or credit cards, or set up a prepaid Alipay balance, then pay directly from their mobile devices or computers using the app or website interface. Alipay also provides other financial services, such as transfers, bill payments, and mobile top-ups. 


2. WeChat Pay

WeChat Pay, known as “Weixin Pay” in China, is a hugely popular payment platform in China, second only to Alipay in the Chinese payments market. It was founded in 2016 as an offshoot of WeChat (Weixin), a widely-used social messaging app from Chinese tech company Tencent. WeChat Pay works in much the same way as Alipay and other digital wallets, with users linking their cards and accounts to the app in order to make seamless payments both in person and online.

Like Alipay, WeChat Pay has also expanded its reach by offering additional services, from financial products like personal savings accounts to e-commerce services like food delivery and tickets for public transport. WeChat Pay even created a digital version of the Chinese tradition of giving red envelopes filled with money to loved ones on special occasions. Their  “WeChat Red Packets” service makes it easy to send monetary gifts to friends and family and is a perfect example of how the app engages with its users and embeds itself into their daily lives.

3. UnionPay

Although cards are not a popular payment method in China, the country does have one state-owned banking services provider and card scheme known as UnionPay. UnionPay issues debit and credit cards, manages all ATMs in China, and offers mobile payment services.

Unlike Alipay and WeChat Pay, UnionPay is widely accepted internationally, making it a popular choice for Chinese tourists travelling abroad. Competing globally with other major card brands has been a major component of UnionPay’s strategy. The company has formed partnerships with big banks and payment networks across the world. For example, in 2007, UnionPay entered into a reciprocal card agreement with Discover, allowing its customers to use their UnionPay cards wherever Discover cards are accepted (and vice versa). It has similar agreements with card companies in Japan (JCB), South Korea (BC Card), and India (RuPay).

How do Chinese payment methods work? 

In-person payments

When using Alipay or WeChat Pay to buy items or services in person, shoppers are typically prompted to scan a QR code containing their unique transaction details. From there, they can view the amount owed and approve the payment using biometrics or by entering their password/PIN. QR codes are also used for peer-to-peer payments. For example, instead of providing a couple with a tangible wedding gift, the couple can display a unique QR code that allows their guests to send monetary gifts directly to their account. 

Online payments
Online payments in China function in a similar way to online payments elsewhere across the world, but with mobile wallets WeChat Pay and Alipay at the front and centre. Rather than typing their credit card details into a checkout form, most people in China simply select their preferred mobile wallet when paying for goods and services online. These wallets use biometric data, such as facial or thumbprint recognition to verify to user and process the payment. 

Payment apps with integrated services
As mobile wallets Alipay and WeChat pay continue to grow, they’ve expanded their portfolio beyond payments, providing integrated services such as wealth management, insurance, personal loans, and even ride-sharing. They’re also integrated with the e-commerce and social networking services of their parent companies. Users are able to access and use all of these additional services directly within a single, user-friendly platform.

Top 4 benefits of accepting Chinese payment methods

1. Market access

The most obvious benefit of accepting Alipay, WeChat Pay, and UnionPay is that it opens up access to a vast market of consumers. Whether travelling abroad or shopping online, many Chinese consumers regularly buy goods and services from companies outside of China. If you fail to offer Chinese payment methods, you’re likely missing out on this significant segment of the global market. 

2. Higher conversion rates

When shopping online, Chinese consumers are likely to abandon their carts if they arrive at the checkout page and see that no Chinese payment methods are accepted by the merchant. Adding Alipay, WeChat Pay, and UnionPay to your list of payment methods will help prevent this scenario, leading to more sales and higher conversion rates. 

3. Enhanced customer experience

Including Chinese payment methods in your checkout process, both for in-person and online sales, gives your Chinese customers a quick, easy, and familiar way to pay. It saves them the hassle of having to find an alternative payment method or withdraw cash when travelling abroad. It also signals to your Chinese customers that you’ve considered their needs and care about their preferences and convenience. It makes for a generally more pleasant customer experience, helping foster loyalty to your brand. 

4. Competitive edge

By including WeChat Pay, AliPay, and UnionPay in your list of approved payment methods, you’re giving your business a competitive advantage in the Chinese market. For example, a hotel that advertises its acceptance of Chinese payment methods will automatically be more attractive to Chinese tourists than a competitor that only takes Visa and Mastercard. This seamless booking and checkout process can lead to more word-of-mouth referrals, and the hotel can quickly become the go-to accommodation option for Chinese tourists in that city. 

How to accept payments from Chinese consumers

Whether you sell online, in person, or both, adding Chinese payment methods is easy and straightforward if you choose a payment service provider that specialises in helping businesses manage this process. Look for a payment service provider that has a global mindset and stays on top of the ever-changing payments landscape. 

You’ll want to work with a payments company that keeps up with consumer trends around the world so that you never miss out on opportunities to broaden your reach and connect with more customers.

1.    Understand the preferred payment methods in China

The first step is to familiarise yourself with the popular payment methods in China and how they work. This will allow you to better understand the sales journey for Chinese consumers.

2.    Find a payment services provider that accepts WeChat Pay, Alipay, and UnionPay

Whether you’re selling goods or services online, in-person, or both, attracting and accommodating Chinese customers requires you to adopt Chinese payment methods. Having a payment gateway and a point-of-sale terminal that works with WeChat Pay, Alipay and UnionPay will put you a step ahead of your competitors and instantly ingratiate you with your Chinese audience.

3.    Integrate currency conversion into your payment gateway

In addition to accepting Chinese payment methods, it’s also worth adding automated currency conversion, like Dynamic Currency Conversion, to your payment gateway so that Chinese shoppers can view the payment amount in their local currency. This creates a more familiar and transparent payment experience for your customers.

4.    Stay compliant with Chinese payment regulations 

When accepting international payments, it’s always important to research and understand the different payment industry regulations in every country in which you conduct business. Similar to the Payment Card Industry Data Security Standard (PCI DSS), China has its own set of standards for security and data protection, including its Personal Information Protection Law (PIPL), Cybersecurity Law, and Data Security Law.


What currency is used for Chinese mobile payments?

Mobile wallet payments in China use the Chinese Yuan (CNY), also known as Renminbi (RMB), as well as the “digital renminbi” (e-CNY), a central bank digital currency released in 2019.

What advantages do WeChat Pay and Alipay have over traditional payment methods?

From their inception, WeChat Pay and Alipay were created for the mobile phone user. Unlike other payment methods, they haven’t needed to adapt an older system to suit the current times. They emerged at a time when mobile phones were already in use and on the rise. As such, they are user-friendly and seamlessly integrated into the daily lives of their users, embedded into social networking, online shopping, and a wide range of other services. Both WeChat Pay and Alipay also offer a range of financial services that go beyond the scope of many other digital wallets, including bill payments, peer-to-peer payments, savings and investments, loans, and insurance. 

What fees and charges are involved in adding Chinese payment methods to my payment gateway?

As with most payment processors, WeChat Pay, Alipay, and UnionPay charge transaction fees as a percentage of each transaction. For example, as of January 2024, Alipay and WeChat Pay both charged around .6% of the transaction value per transaction. UnionPay charges an acquiring bank fee of 0.2% to 1.5% of the transaction amount per transaction, plus a fixed .1% network fee per transaction.

For all of these payment methods, there are additional charges and higher rates associated with cross-border transactions. Those who link a foreign credit card to one of these Chinese digital wallets will likely be subject to higher transaction fees as well.

For merchants, standard payment processing fees, such as chargeback fees, setup fees, and monthly or annual maintenance fees generally apply. 

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