Payment in China Circle Pleasure

Payment in China
By Toine Rooijmans
Director of Strategic Operations

Introduction
Joined a 3D games and shopping startup
Developing a 3D world in Korea
Want to launch it in China.
Key are virtual item sales……
But how do you pay for it?

Compared various payment options
Market is fragmented
There is no paypal for the Chinese market
Alipay has a lot of political enemies
Doesn’t share with UnionPay

What is UnionPay?
UnionPay is the government appointed authority on payment
Take a cut on every transaction
Banks hate them

What about CreditCards then?
Credit cards are actually Post paid UnionPay cards
The Visa/Mastercard thing only works OUTSIDE of China
Creditcards have to be co-issued with foreign banks

So What about Credit Cards?
Most people don’t have them.
Pushing hard
Go to a commercial area
Sign up stands where you get “LockLock boxes”
2nd and 3rd tier cities are still miles away
Shanghai has only 500.000 POS terminals
20% market penetration

How do I pay online?
TaobaoAlipay
Get a bank account
Activate online payment (2 forms, 4 stamps)
Set quota for online payment / month / day
Sign in to online banking (get out your random number generator or your SMS)
Get another code
Pay

So how do people pay?
Chinese people love stored value cards “gift cards”
China’s answer to micropayment
QQ coins, SNDA point cards, Netease cards
Experience point cards
SNDA has 100.000 part-time employees to deliver cards nationwide
Pre-sold the points rights to Bailian Group who already made 300 million RMB off of it.

Our idea
We should do it better
Get the licenses
Prepay card license (67 companies have one)
Makes gaming tax deductible!
Make it available for everybody
Create prepaid cards that are open to anybody to partner with at a 1% flat rate.

Move forward
License secure payment technology
Integrate RFID, Security chip, Memory
Next generation
Micro payment
Transportation
E-coupons
Javascript programmable extra features

Questions?