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OpenRoad Auto Group is a convert. So is Profile Laser Centre in Richmond. As is Vancouver’s city-owned parking system, EasyPark. Oh, and Holt Renfrew and Sprott Shaw College and more every passing month (Nordstrom just announced they’re on board, too). Their common friend? China’s hugely popular social media platform, WeChat, which allows users to do everything from booking a restaurant to calling a taxi to talking with friends to paying a bill.
It’s that last function, more precisely called WeChat Pay, that Vancouver (and, indeed, North American) businesses are learning to love. A lot. “Six months ago, I’d never heard of it,” says Merry Zolfaghari, the owner of Profile Laser, an aesthetics business that she’s run in a Richmond mini-mall for the past 13 years. But she knew she had a lot of Chinese clients willing to use it. Within months of signing up, she saw a five-times return on her investment in the system—about $3,000 for marketing to advertise her new payment option, along with the approximately $80-a-year charge for the electronic terminal that processes the payments—and almost half of her clients were using it.
Out in Burnaby, OpenRoad’s area general manager, Brad Beckett, was interested as well in the WeChat Pay system. About 60 percent of the dealership’s customers in that location, many of whom are students, speak Mandarin, and the dealership already tries to cater to that group. “We wanted to give our customers a high level of treatment. This has made everything a little easier. It increases the ease of buying,” he says. Since the company introduced WeChat Pay as an option last October, about 10 percent of its Chinese-speaking customers use it to pay for the $5,000 deposit on their cars (the only part of the purchase OpenRoad accepts WeChat payment for).
And it’s getting easier to hook into the system because of North American connectors like Lancho Cephivenus. Chobee Aesthetic Marketing, the Vancouver-based company he formed three years ago, is on a campaign to introduce Canadian businesses to the social media pay platform. He’s found that personal care and aesthetics-focused businesses are particularly fertile ground.
Many new immigrants also don’t have or can’t get credit cards in Canada when they first arrive, so being able to pay through WeChat is an advantage for them, he points out. As well, they’re just more familiar with WeChat than with other social media platforms.
“The recent immigrants aren’t in the habit of using Facebook or Google, so if you want to get their business, you need to do it through WeChat,” says Cephivenus, who is originally from Taiwan. “And they still store their money in China.”
That would be people like Barton Li, a realtor who has lived in Vancouver for 18 years but still travels back to his hometown of Guangzhou frequently and maintains a bank account there. “Before, I would have to bring cash back from China. This is very convenient for me. I use WeChat a lot, so it’s always in my hands.” Li uses WeChat Pay mostly for small purchases—when he goes to the grocery store, for example—and spends about $500 a month using that system.
No one has exact statistics, but Cephivenus estimated earlier this year that about 4,000 businesses in Vancouver and Toronto are using WeChat Pay, with about 700,000 users in Toronto and 400,000 in Vancouver. In general, businesses like it because it helps them attract those customers who don’t yet have credit or sometimes even a bank account in Canada. As well, it’s seen as being as secure as Visa or Mastercard. And the charges (about 1.5 percent of each purchase) are lower than some credit cards. (Businesses are also interested in Alipay, another payment system from China associated with the Alibaba empire that was created originally to help customers make payments to the Amazon-like company’s online shopping site.)
There are limitations, however. WeChat Pay, which is part of the Tencent Holdings multinational based in China, can’t be used to buy items seen as investments, says Cephivenus. It can be used to pay for the legal fees associated with buying a house, but not for the house itself. Nor can it be used for insurance. And it can’t be used to get around China’s limit on taking capital out of the country, currently set at $50,000 (U.S.) a year.
While some people who have used WeChat Pay aren’t sure about the exact legalities, immigration lawyer Richard Kurland is. He is sure that the system can’t be used to get around the currency controls. “WeChat would normally want to keep annual tabs on totals exported, to ensure compliance with currency export controls,” he said in an email. “I’m not trained in Chinese law, but it seems that WeChat might be held liable for infractions.”
Of course, that’s a reminder that there’s always the surveillance aspect of the system, as users around the world have discovered with all social media platforms. Lotus Ruan, a researcher with the Citizen Lab at the University of Toronto, observes that the platform does bring that issue with it. “We released a report on how WeChat applies a different censorship policies to users who signed up with a mainland Chinese phone number versus those who signed up with an international phone number,” says Ruan. “In a nutshell, censorship on WeChat is enabled only to users signed up with a mainland Chinese phone number, and it persists even if they later link their account to an international number. This can potentially affect students abroad, tourists, business travellers, academics attending international conferences, and anyone who has recently emigrated out of China.”
In spite of that, fans continue to pile into the system. Toward the end of 2017, WeChat had almost a billion users in China. Vancouver, which functions almost as an outpost for China, has a significant number of those users circulating throughout the city. And more and more businesses want access to that market. Yes, the high-end ones like Holt Renfrew and the luxury car dealerships. But also those as mundane as parking companies. EasyPark boasted last November that it was the first parking organization in B.C. to offer this “motion pay” service. And it bubbled about its future expansion. “EasyPark has plans to extend WeChat Pay and Alipay to all their Vancouver locations, including high-volume tourist centres like Stanley Park, Queen Elizabeth Park and Jericho Beach.” Can Translink and McDonald’s be far behind?