Apps ease purchases for tourists and international shoppers


There was a time when “payment options” meant perhaps three choices: cash, check or charge.

Today’s crop, however, includes the rapid expansion of new payment systems from around the world — including China, Australia and even Sweden — into North America. And retailers are lining up: Neiman Marcus Group now accepts the Chinese digital payment platform Alipay, which Alipay North America General Manager Yulei Wang calls “the superhighway between North American businesses and Chinese consumers.”

Alipay, which launched in-store payment service in the United States for Chinese tourists just a few years ago, now serves more than 1 billion people worldwide. More than 4 million Chinese consumers visit North America annually. And according to the U.S. Travel Association, China will become the largest source of tourists coming to the United States in 2021, with 5.7 million Chinese expected to visit.

Alipay isn’t the only Chinese mobile payment system seeking to serve those tourists. Alipay and direct competitor WeChat Pay have both ramped up expansion, and now are available in about 50 nations and regions. Next in line is China-based credit card company UnionPay, which launched a mobile pay app in late 2017 and amassed more than 150 million users in its 18 months.

From Australia, there’s Afterpay. The digital platform claims increased conversion rates, larger basket sizes, lower return rates and more referrals by offering interest-free installment plans for in-store and online purchases. As of this summer, more than 2 million U.S. customers had made purchases from retailers using the platform including Anthropologie, Bandier, DSW, True Religion and Urban Outfitters. In its first 11 months in the United States, the company says retailers using Afterpay saw underlying sales of $780 million — and increases in conversion of 20-30 percent.

As for Sweden? That’s Afterpay shop-now, pay-later competitor Klarna, already working with more than 130,000 retailers worldwide. In August, the company announced it had raised $460 million in equity funding, aimed at continuing its “rapid rise in the U.S. market,” where it says it is currently growing at an annual rate of 6 million new U.S. consumers.

Klarna co-founder and CEO Sebastian Siemiatkowski calls the expansion of new payment options “a decisive time in the history of retail banking.”

“Finally, transparency, technology and creativity will serve the consumer, and there will be no more room for unimaginative products, non-transparent terms of use or lack of genuine care of one’s customers,” Siemiatkowski says.


At Neiman Marcus, accommodating customers from around the world markets — including China — is a key part of the business strategy.

“We strive to be as accommodating as we can so there are no barriers for our customer to shop the extraordinary products we carry,” says David Goubert, executive vice president of retail experience. As the international base of customers has grown, the company has increasingly explored new forms of payment technology, he says, and “it became clear to us that Alipay was a valuable tool to connect with customers, especially since it was a channel many customers were already using.”

“At an increasing rate, consumers expect and need their favorite retailers abroad to accept mobile payments, and not just because they don’t want to carry cash or have to exchange it for the local currency,” Alipay’s Wang says. “When traveling far from home, our users want the security reassurance that only a mobile payment option such as Alipay can provide. Alipay users get a digital receipt and an immediate record of transactions right on their phones, and the added value that Alipay offers such as fraud protection. This additional security allows Alipay users to enjoy traveling around the world without worrying about their money.”

When Alipay users log in, they can see that Neiman Marcus uses the system. In-store, customers simply show their unique Alipay QR code to a sales associate, who then scans it to complete the transaction. Alipay pulls the funds from their account and transfers them to Neiman Marcus and — like conventional credit cards — charges the merchant a transaction fee. If there is a promotion happening, Alipay customers may also see an advertisement in their app with details on the sale.

The integration process was “seamless,” Goubert says. Neiman Marcus worked with RiverPay, an integrated payment platform, to adapt its point-of-sale system to accommodate the Alipay QR code. The entire integration took less than two weeks, and Alipay can now be used in 43 Neiman Marcus stores, 24 Neiman Marcus Last Calls and two Bergdorf Goodman locations in New York City. Neiman Marcus also accepts WeChat Pay, and is developing a presence on the social platform. Next up? Working with Alipay to add the platform as an online payment option in the future.

“Alipay is constantly exploring ways to make the entire customer experience better,” Wang says. “We not only look for partners who share our vision of convenience and security, but companies we partner with also help create a very positive and comprehensive end-to-end experience for our mutual customers. From assistance with digital marketing, to offering dining recommendations, to discounts and investing capabilities, Alipay’s partners understand today’s consumers have high expectations when it comes to technology.”

Neiman Marcus and Alipay are both known for “transforming and elevating the shopping experience,” Wang says, “making this exactly the kind of strategic partnership that will greatly benefit Chinese tourists who come to the U.S. to sightsee, explore and shop. Both companies provide exceptional service and unique offerings to stand out in a very competitive marketplace.”

A 2018 report from Nielsen showed that two-thirds of Chinese tourists had used smartphones to pay for goods and services while traveling — and that 91 percent of Chinese abroad would be more willing to shop at overseas merchants if offered the opportunity to pay using Chinese mobile payments.

Nearly 60 percent of retailers who have deployed Alipay have seen growth in both foot traffic and revenue, Wang says.


North of the U.S. border, Canadian specialty retailer Sleep Country announced this summer it would accept both Alipay and WeChat Pay in 21 of its Toronto- and Vancouver-area stores. (Overall, Sleep Country has 275 stores and 16 distribution centers across Canada.) Sleep Country worked with payment gateway provider SnapPay, an official acquirer for all three Chinese payment platforms, on the effort. In announcing the news, SnapPay noted that as of 2016, there were more than 1.7 million Chinese immigrants living in Canada, more than 600,000 Chinese visitors and more than 140,000 Chinese university students studying there, and the numbers keep growing.

Sleep Country was “very receptive out of the gate,” says Spencer Xu, CEO and founder of SnapPay Inc. “The value proposition is solid: We bring in new customers (using platform marketing), who spend more with untethered access to Chinese funds and we reduce costs.” Because Alipay and WeChat Pay are enormous companies with well over 1 billion users, he says, the huge purchase volumes running through their systems allow for better foreign exchange rates.

In addition to providing payment technology and facilitating settlement of merchant accounts, SnapPay offers “robust marketing solutions for our clients, in Chinese, on Chinese platforms, to drive Chinese community engagement with the brands at a local, hyper-targeted level,” Xu says. “This is important as Alipay and WeChat Pay are fundamentally digital platforms. Engaging consumers on the platform is critical to drive spend.”

The rollout went without challenge, and initial response has been positive, according to Dan McKinley, Sleep Country’s vice president of sales, business development and marketing. It was simply a matter of mapping the pilot stores against areas with high numbers of Chinese residents, tourists and students.

“We offered an initial Alipay coupon promotion to entice Chinese users, and customers were quick to take advantage of it,” he says. “The promotion sold out ahead of schedule, and we are pleased with customer activity.”


Not all payment advances are driven by Chinese consumers.

That’s where systems like Afterpay come in, and U.S. CEO Nick Molnar says the company “couldn’t be more excited about the opportunity ahead.” The Australian firm introduced its interest-free installment plan digital platform to U.S. audiences in 2018 for both in-store and online purchases. In its first year, it reached 3,300 retailers including Levi’s, Ray-Ban, O’Neill and Tarte Cosmetics. As of summer, Afterpay was working with more than 30,000 retailers worldwide.

“It was our global retailers who encouraged us to enter the U.S. market,” Molnar says. “The U.S. market has exceeded our expectation in retailer growth and consumer engagement, proving that U.S. millennials and members of Generation Z — those born since 1995 — are similar to those in Australia. They prefer a way to pay that allows them to pay over time, without incurring debt, paying interest or fees — especially when buying fashion and beauty.”

Millennial consumers, he notes, “grew up watching their parents struggle during the global financial crisis, and many of them are contending with student debt and high housing costs. Our research shows that, for these reasons, this generation is generally skeptical about using credit cards and wants to avoid getting trapped in the high-interest debt spiral. In fact, a 2018 Bankrate survey found that nearly two-thirds of Americans aged 18—29 do not have a single credit card. These consumers are looking for other payment options to help them stay on budget and avoid high-interest debt, but at the same time, offer convenient, secure and transparent ways to pay without fees.”

Naturally, there are fresh opportunities for engagement: Afterpay holds a biannual two-day sale called Afterpay Day. More than 1,100 U.S. retailers participated this August, and participating retailers saw an average increase of 41 percent in gross merchandise value; Molnar says one small business saw value rise more than 500 percent. In addition, there were more than 700,000 retailer referrals from the Afterpay Shop Directory during the August sale period.

Afterpay works with fashion and beauty retailers of all sizes to focus on opportunities for true “mutual partnership,” Molnar says. Afterpay helps those retailers connect with new audiences, which ultimately increases their average order value, incremental sales and conversion, he says.

Payment apps — particularly those from outside the United States — still make up only a small percentage of the U.S. payments market compared with credit and debit cards and even cash. But the payments frontier is rapidly evolving — and foreign companies that offer payment apps say the U.S. market can expect to see the world flooding in.

Fiona Soltes, a freelancer based near Nashville, Tenn., loves a good bargain almost as much as she loves a good story.


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