Back to the era of e-commerce, the payment industry “choose one from two” has a long history
In fact, the payment industry has a long history of choosing one over the other, dating back to the era of e-commerce. Since the beginning of Taobao, Alipay has become the only third-party payment method recognized by Taobao and Tmall. It is understandable that Taobao and Tmall support Alipay as e-commerce platforms hatched from Alibaba’s ecosystem. But in the new era of retail, Alibaba has also applied the same rule to offline stores.
Since 2014, KFC, 85 Degrees C, Zhouheiya and other brands, due to the constraints of business cooperation terms, only support Alipay and do not accept wechat pay, a few years later these brands began to adopt wechat pay. It is even harder to see wechat pay in shopping malls such as Intime, Sanjiang Shopping, Bailian Group and Xinhuadu that Ali has successively invested and acquired. In the new retail era, Ali and Tencent have developed their own retail systems, and the payment war between Alipay and wechat is also imminent.
As we all know, traffic is extremely precious in the Internet era, so the channel to obtain traffic is also very important. In fact, the competition for traffic can be attributed to the competition for data resources. In order to occupy more market share, Internet enterprises often play a good card of consumption subsidy and preferential treatment to squeeze their competitors. In the field of payment, this kind of competition has evolved into the payment method of folding and hiding competitors, or even directly or indirectly outlawing the payment entrance of competitors, virtually forcing users to choose one from the other.
Ali started the war of “choose one from two” at the earliest, which was determined by the gene of Ali’s continuous expansion of its business territory through acquisition and merger. From the perspective of industry, competition is everywhere in the commercial society, and competition is the most normal. As one of the payment portals with high popularity, Alipay not only provides convenient payment channels for merchants, but also exercises its control virtually, gradually bringing more enterprises under its control.
Merchants are invisible victims of the payment “one or the other”
Alibaba acquired Sun Art retail, rT-Mart’s parent company, in late 2017. Earlier this year, Sun Art director and RT-Mart founder Huang Mingduan resigned and was replaced by Alibaba CEO Daniel Zhang. In just a few months, six senior rt-Mart executives have left the company, leading to a shake-up at the top. After 20 years of hard work, RT-Mart fell victim to the “alternative” of mobile payment.
At rT-Mart’s earnings conference last month, Huang Mingduan, chairman of RT-Mart China, said that The entire technical transformation of RT-MART’s POS system is being rewritten and paid for by Alibaba, and stores may only use Alipay in the future.
In the industry, Ali department has always maintained an aggressive strong two choices, its partners have to obey or be acquired two ways to go. Rt-mart is a cautionary example. After being acquired, rT-Mart could not preserve its independent operation system, and would even be subject to the strategy of ali Ecology, and eventually became a tool of giant competition and a victim of the battle for payment entry.
Looking at other enterprises from the same perspective, merchants often lose their independent choice on payment methods and are forced to “choose one from two”. After all, for these enterprises, rather than deep empowerment or complete control, they need an open infrastructure platform, equal and win-win cooperation, and are more willing to preserve their own values and aspirations to achieve self-growth.
Wal-mart’s counteraction against Alipay is just an example of many retailers’ counteraction against Alibaba Pay. Carrefour, Wanda Commercial, BBK, Heilan Home and many other retailers are also not satisfied with alipay’s cooperation mode, and have reached cooperation with Tencent. Tencent, on the other hand, offers less restrictions and a more open cooperation environment for merchants. Obviously, merchants can gain enough respect in terms of business privacy and data cooperation with Tencent. According to business Observer, Better Life chairman Wang Tian even commented on the retail cooperation with Alibaba: “Alibaba is an imperial ecosystem. It is not open. When they ask for your data assets, they just take them away. Alibaba refuses to share in this [data asset realisation] and wants to monopolise the profits.”
Consumers are also victims of the “one or the other.
Obviously, the “two choose one” competition situation will ultimately damage the interests of consumers. Nowadays, mobile payment has largely replaced cash payment. On April 2, analysys released data analysis of China’s third-party mobile payment market in the fourth quarter of 2017, which showed that the transaction scale of the third-party mobile payment market was 37.7 trillion yuan, with a sequential growth of 27.91%. Among them, the combined share of alipay and wechat Pay is as high as 92.41%, occupying the absolute dominant position.
Both wechat and Alipay are essential apps for users with mobile payment habits. Different users’ payment habits must overlap and cross, and “choosing one from the other” completely deprives users of their right to choose. Forcing users to “choose one from two” is a bad way to hurt the enemy, especially when the war between the two payment giants affects users. The “choose one” payment method undoubtedly reduces user experience, and consumers become the victims of “choose one”.
Nowadays, the biggest advantage of the Internet era is decentralization. Consumer demand can directly contact each node in an industrial chain, which determines that the one who can grasp user demand, identify user pain points and provide solutions will gain the market. Nowadays, the payment “choose one or two” is to use its own influence to exclude others, which does play an effect of squeezing competitors. But more importantly, this way is a disguised abuse and consumption of users’ trust. At the expense of users’ interests, the reputation of the payment platform will inevitably be affected.
It could even be argued that forcing users to “choose between two” is a setback for the industry as a whole. Major businesses will also be focused on winning and losing in the short term, rather than crushing rivals in technology and services, creating a morbid competitive atmosphere. Therefore, neither Tencent nor Alibaba should force retailers to choose between two options, let alone pressure users to make mobile payments less convenient.
Wechat Pay goes left, Alipay goes right: the parting of the two payment giants
For Tencent, a few days ago, according to titanium media reporters interviewed micro channel payment industry center Deputy general manager Huang Li reported that Huang Li said: “Tencent will not recommend, will not block merchants access to Alipay.” In the case of Walmart, walmart said it would cooperate with Alipay, but in a different way. For cooperation, wechat Pay said it only provides a series of digital tools for merchants, does not obtain merchant data, and honestly completes the infrastructure. Wal-mart’s position reflects the differences between the two payment giants in the form of cooperation.
For Ali, Alipay has chosen a completely different strategic route with wechat. Step by step related person in charge said: because alipay’s way of cooperation is too strong, it only as a level of entry, do not accept two-way access. In other words, customers can only enter Alipay first and then flow into BBK payment, rather than enter Alipay through BBK’s payment tool. Such a payment deficit leads to one-way data entry. For want to do digital transformation step by step, this form of unequal cooperation is undoubtedly fatal.
From this point of view, wechat Pay wants to be the service infrastructure, mainly through mobile payment, big data, AI and other new technologies to empower merchants; On the other hand, Alipay penetrates deeply into enterprises, controls resources such as data and technology, and expands its own ecological territory. The two payment giants’ parting of ways means different ways of cooperation, which will also determine the two payment giants’ different future directions.
The author believes that mobile payment, as a participant in China’s retail reform, should empower offline merchants, and only in this way can it truly achieve a win-win situation, instead of interfering with merchants, otherwise it will only be countered by more retailers.
Article/Liu Kuang public account, ID: Liukuang110