Can Alipay's "Tap and Pay" feature surprise attack WeChat Pay?
Text | Peng Qian
Editor | Qiao Qian
When "QR code payment" is ubiquitous on the streets, on what does Alipay rely to shake the payment wall built by QR codes?
Businesses were the first to sense Alipay's ambition. In mid-2024, many offline chain brand merchants and service providers found that Alipay is promoting a new payment method called "Tap Once", which has brought them new business opportunities.
"Each physical merchant can get a maximum subsidy of 6,000 yuan per month; promoters can also get rewards. For each device processed and each merchant settled, the promoter can get a commission of 560 yuan, and the daily income can reach thousands of yuan; for service providers, the account opening reward is 100 - 150 yuan per device, and the sales promotion reward is 40 yuan / 60 yuan / 80 yuan per device per month for 6 months."
Since its official launch in the first batch of cities such as Shanghai, Changsha, Wuhan, Qingdao, Chengdu and Hangzhou on July 8, in just over 4 months, Alipay's "Tap Once" has covered more than 50 cities and millions of large and small stores. "It seems that Alipay wants to eliminate QR code payment, and the action is very fast," a service provider commented to 36Kr.
Inside Alipay, "Tap Once" can be regarded as the top project in the past two years. According to 36Kr's understanding, In early 2023, Jing Xiandong, the chairman of Ant Group, proposed internally to investigate a more convenient payment method than QR code payment, such as the superimposed use of NFC technology; in July 2023, the prototype design was initiated; one year later, "Tap Once" was officially launched.
Third-party data shows that although it is still the largest third-party payment APP, Alipay's share in China's third-party mobile payment market has dropped from nearly 80% in 2014 to 55% at the end of 2023; its user data has also encountered a growth bottleneck, gradually lagging behind WeChat Pay. Alipay has not updated the user data since it announced that the number of users reached 1 billion in 2019.
"Alipay has long wanted to promote NFC. At the beginning, the promotion of QR code payment was a passive response to WeChat Pay. At that time, NFC technology was not widespread enough. Now, Alipay certainly hopes to continue to be a market leader and make a new breakthrough in the payment method," a payment employee told 36Kr.
Since 2023, Alipay has proposed the "Double Flywheel", aiming to do a good job in both the Internet platform and the payment APP. Recently, it has also adjusted the organization again, newly establishing two business groups, the Alipay Business Group and the Digital Payment Business Group. On the one hand, it is intensifying content and opening up commercialization to find increments. On the other hand, it is trying to make innovations in the payment field to consolidate the positioning of the payment tool.
Alipay Tap Once device, image from Alipay official
Everywhere "Tap Once"
Users quickly perceive the existence of "Tap Once".
Xiaomin, who lives in Changsha, found that when entering chain stores such as Qianji Bakery, Snack Busy, Qian Dama, and Miniso, and even restaurants near the community, the "Tap Once" devices can be seen everywhere.
Xiaomin, who has always used an Android phone, thinks this new thing is faster than QR code payment: After initially setting the permissions, there is no need to open Alipay again. After unlocking the phone and tapping the blue ring-shaped recognition area, almost at the same time, a crisp "ding" comes from the payment device, and then the payment success information is displayed on the screen. The entire process takes less than 3 seconds.
A mobile payment industry insider told 36Kr that "Tap Once" is based on NFC (Near Field Communication) technology, so the usage experience is very similar to NFC, but in fact, it is also related to QR code payment.
Before Alipay picked it up again, NFC was an "old story" that was not well told. More than ten years ago, Apple tried to promote NFC payment, but it was not successful. The main reason was that the POS machine rate was as high as 2 - 3%, and merchants were not willing. In addition, NFC was not widespread at that time, and many brand smart phones did not come with this technology. The rate of "Tap Once" is only 3‰, and this technology has now become widespread.
The coverage density of "Tap Once" in the first batch of cities is very high.
Shanghai is the first pilot city of Alipay. "Tap Once" has spread from the first store in Jing'an Dayuecheng to Huaxin Vegetable Market in the Qingpu suburbs. In Changsha, whether it is 21 commercial streets and complexes such as Guojin Street and Hisense Plaza, or snack chain stores such as Black Classic Stinky Tofu, Juewei Duck Neck, Snack Busy, and Dai Yonghong, or convenience store chains such as Meiyijia and 711, and catering brand stores, tens of thousands of stores have installed the device.
The usage scenarios of "Tap Once" are also more diverse. It can not only be used for payment but also for ordering. Xiaomin once ordered in a hotpot restaurant on Guojin Street by "Tap Once". The process was very smooth. There was no need to open WeChat and Meituan separately. The closed loop from placing an order to making a payment could be completed within Alipay.
You can order directly by Tap Once. The picture is taken by the author.
Since the birth of QR code payment and the unification of the payment ecosystem, there has been no payment method that can compete with it for a long time. Even the face recognition payment, which was widely commercialized due to the launch of face recognition on smart phones 7 years ago, is still far from becoming the mainstream payment method. The palm recognition payment mainly promoted by WeChat two years ago has not made much impact except for a small-scale popularization in specific scenarios such as campuses.
In the current environment where enterprises are reducing their budgets one after another, Alipay's determination to promote "Tap Once" is therefore quite remarkable.
According to 36Kr's understanding, the promotion subsidy and device installation in just 4 months have exceeded 10 billion yuan. Alipay also continuously transfers personnel to supplement the project team. An internal statement is that Alipay plans to invest at least 30 billion yuan for the first batch of promotions.
"Tap Once" has indeed played a role in attracting new users and diverting traffic for Alipay to a certain extent.
Joe lives in Beijing. He usually only uses JD.com and Pinduoduo for shopping, and uses WeChat and Meituan for life services. He has not downloaded Alipay before, but recently, the Qian Dama clerk downstairs in his community almost promotes the "Tap Once" device to him every time he makes a payment.
Alipay also uses a gamified gameplay similar to the Five Blessings Collection.
"At first, I was not used to it. Now I will use it from time to time. I can't resist the discounts. Sometimes I can get a discount of several yuan." However, Joe admitted that if there is no clerk recommendation or he does not get a large discount, he is still used to using WeChat QR code payment.
After interviewing users in Shanghai, Hangzhou and Changsha, 36Kr also found that "Tap Once" is more beneficial to Android users because it is almost a new function for them, and the usage steps are significantly reduced compared to QR code payment.
iOS users have many complaints about "Tap Once". Due to the restrictions of Apple iOS on the use of NFC outside the ecosystem, many iOS users say that "Tap Once" is not as convenient as Apple's own NFC payment: "It is not a simple tap. Every time you need to evoke Alipay, it is very troublesome. Android is like swiping an access card, just a drip." For many iOS users, touching still requires setting permissions and opening the Alipay APP, which is almost no different from QR code payment. The consensus among iOS users is that unless Alipay and Apple Pay cooperate to launch a virtual card, it is still not convenient.
Occupying the Offline Market
For Alipay, it is of strategic significance that those users who used to only use Alipay when placing orders on Taobao and preferred to use WeChat Pay offline are now more willing to use Alipay for offline payments because of "Tap Once".
With the help of Taobao's e-commerce, Alipay has a good conversion rate online, but it has always lacked a more powerful and differentiated grip offline.
This has historical reasons. Alipay launched barcode payment one year earlier than WeChat Pay (in 2011) and also took the lead in promoting QR codes (in 2012). However, at that time, the Alibaba system lacked a mature mobile terminal product. Taobao Mobile was not launched until October 2013, and the all-in mobile strategy was in 2014. Alipay was just a simple income and expenditure tool, and QR code payment was not immediately popularized in Alipay's hands.
This gave WeChat Pay an opportunity. It quickly leveraged the social capabilities of WeChat, combined with the "Scan" function, and permeated deeper and faster in the offline market through scenarios such as QR code ordering and ticket verification, enjoying the dividends of mobility. As a result, Alipay was forced to change from a pioneer to a follower.
Half a year after its launch, many users have begun to frequently use the new function of "Tap Once", but in the early stage, "Tap Once" still has many problems to be solved, and it is too early to talk about whether it can replace QR code payment.
The first problem is the issue of security and trust. In the eyes of some users, the convenience of "Tap Once" has backfired: QR code payment requires entering a password, and face and fingerprint also require biometric identification, but "Tap Once" even eliminates the verification step. "QR code payment is like handing out the money. I have the option to change the amount or not to give it. But with Tap Once, I have no sense of control and no sense of security," a user told 36Kr. Some people are also worried that if they forget to lock the screen and keep the phone on, it can be randomly "tapped" in the pocket or bag.
An agent of "Tap Once" believes that the scenarios of "Tap Once" are actually limited to some extent. QR codes can be posted everywhere and allow a farther distance. Some shopping mall parking lots can also scan the small ticket code in advance for parallel processing. "Tap Once" still needs to be attached to the machine, and merchants have to queue to process orders. During peak periods, they simply cannot handle it. "For merchants, in fact, QR code payment is more efficient. Multiple people can scan the QR code and make payments at the same time. According to the current hardware model, without subsidies, merchants' willingness to cooperate will be relatively low."
At present, the merchants who are willing to actively promote "Tap Once" are still mainly various chain snack and pastry stores and shopping center brand stores, because "Tap Once" can allow users to directly join the membership system, which is beneficial for the merchants' private domain operations. However, large brands with self-checkout systems such as MUJI and Uniqlo have not accessed "Tap Once" so far.
Smaller businesses, such as husband-and-wife stores and various individual businesses, do not have enough energy to operate and promote the "Tap Once" device. Store owners often set aside the device at the cashier after receiving the subsidy and will not actively recommend it to users to save trouble. Since "Tap Once" requires both the merchant and the user to maintain a good network environment (NFC only requires the merchant's POS to be connected to the network), these small stores often have unstable networks, which delays the user's payment.
A Zhihu user once lamented: "There is no App like Alipay, with many users and a lot of money in it, but the purpose of opening the App is to show you a bunch of advertisements, mini-games, and videos, and it just doesn't want you to make offline payments." The trend of making Apps heavier is difficult to reverse in the Internet industry. Only by adding innovative scenarios like "Tap Once" can Alipay have the opportunity to reshape consumers' payment mentality and stabilize its position as the national payment App.