According to Chinese Communist Party media, in October 2021, to regulate the use of personal collection barcodes, the central bank issued the “Notice on Strengthening the Management of Payment Acceptance Terminals and Related Businesses,” which will take effect on March 1, 2022.
In the notice, the People’s Bank of China stated that barcode payment collection agencies should provide special merchants’ collection barcodes to individuals with obvious characteristics of business activities, rather than use personal collection barcodes to collect money from business activities.
It is happening, even if two giants in the industry, WeChat and Alipay, debunked it in response.
The key lies in the “obvious business activities.” In the end, how much is to be called “obvious”? WeChat and Alipay are uncertain and are waiting for the central bank to give a clear definition of the criteria.
These companies have dominated the domestic mobile payment market for many years, and now they are being hammered at the same time.
With the massive transfer of personal collection codes to merchant collection codes, the nearly hundreds of millions of small and micro merchants that WeChat and Alipay have accumulated over the years will inevitably be diverted from some of them, preferring a simpler and more direct form of payment collection.
Aggregated payment institutions are the most active. Through “one code access to a variety of collection channels,” many of these institutions again see the opportunity to expand their territory.
The aggregator payment service providers, who have joined hands with banks and non-banking institutions to break through the cracks of WeChat and Alipay, have started to vigorously engage in ground-pushing promotions to bite off more than one piece of cake.
The banks have been waiting for this opportunity and will not miss it.
The four major banks have launched their own “aggregate codes,” which are not simply supported by their bank scan code payments but even supported by WeChat, Alipay, and UnionPay, which are no worse than aggregated payments, as long as ID cards, bank cards, and stored photos are ready in minutes.
Banks have never given up on the mobile payment market that WeChat and Alipay robbed.
China’s mobile payment industry could produce some changes. For decades, traditional banks have been following the iron rule of serving only 20% of high net-worth customers, far away from the 1 billion ordinary people whose needs banks do not understand. The result of the fiasco is no surprise.
WeChat and Alipay account for more than 90% of the domestic mobile payment market. It is with the support of countless ordinary people.
Fortunately, banks have finally changed. They are no longer obsessed with defeating WeChat and Alipay but rather joining forces with these giants to make a bigger cake together.
ICBC was the first to come forward. “Alipay + bank” and “Jingdong + bank” began to be on the front page of bank publicity, burning money to encourage people to use WeChat, Alipay, and Jingdong.