Selling products or services online in China is different from the Western model in one crucial aspect – low prevalence of credit cards and, generally, unwillingness by the Chinese to use them for online payments. Thanks to the rapid ecommerce development in the last decade, China has skipped the credit card era almost entirely by leaping straight toward the age of the digital money.
While offline, cash is still the king, online ecommerce is ruled by giants like Alibaba’s and Tencent.
Just like Alibaba and Tencent, Baidu has both payment and financing license which will enable it to offer similar types of services. It is expected that alternative investment and e-financing services currently being offered by Baidu’s rivals will be coming up too.
Until Baidu Wallet is fully developed and has gained large user base, from a perspective of an out-of-China based company looking to sell online to the Chinese, there are currently two options for online payment integration: Alipay and Tenpay. Both services allow cross border transactions and provide a code for web developers to integrate the system into a website. Once integrated, an online visitor will be able to pay for purchases directly with his/her Alipay or Tenpay account in RMB. Once the transactions is completed, the funds will be exchanged at the same day’s rate and wired to merchant’s overseas account (minus the commissions). Alipay currently supports 12 different currencies and also offers a mobile payment option.
In order to apply for either Alipay or Tenpay, the merchant has to provide a copy of a business license from the home country, passport scans of the owners and filled out application form. The application is then verified and processed which takes about 1 month. Once the application is successful, the agreement is signed and the instructions on technical integration are provided.
