Harrods’ decision to install Chinese debit card firm UnionPay pay points in its London store has led to a 40% increase in sales to Chinese customers in one quarter of 2011 alone.
China is the current global leader when it comes to e-payments and very few non-China based businesses have been able to grab a slice of the lucrative pie.
Harrods is one of the exceptions.
The electronic payment service sector in China has exploded in recent years and is still experiencing rapid growth.
Cards, which largely account for e-payments, made up around 35% of retail spending in China in 2010.
The latest payment technology is covered by Shanghai-based firm Live By Touch, which offers clients a means of using their fingerprints to pay for goods. This biometric payment links the clients’ print details to their bank accounts and enables cash- and card-less payments to be made quickly and easily.
It’s easy to understand why businesses are keen to get involved in this sector. However, third party payment providers are now required to get a licence to enter the market.
“No one would have anticipated that 15 years ago that China would be the world’s largest internet market, one of the world’s largest e-commerce markets and have 750 million, 800 million people with cell phones,” said Gary Rieschel, managing director of Qiming Venture Partners. “So a lot of the rules are reactive as opposed to prescriptive.”
There is an ongoing debate surrounding China and whether it will open up its payment services market to foreign investors.
UnionPay is said to be the third most-used card in the world and is largely owned by China’s Big Four lenders, Reuters reports.
This may explain why sales shot up so highly when Harrods installed UnionPay pay points in its store.
Harrods was able to take advantage of a growing trend in the market and delivered a service many of its customers wanted, hence its success.
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