![]() ![]() Call for more regulation on card brands (Visa, Mastercard, American Express, others), including more antitrust lawsuits.Expect other merchants to adopt their own stored-value wallets and reloadable gift cards. The stored funds allow Starbucks to avoid interchange and card-assessment fees on every purchase. Customers load funds into their accounts and use those funds (plus loyalty-based rewards) to pay for purchases. An example is the Starbucks mobile wallet. Seek alternatives to card-based payments.High merchant fees could eventually prompt North American merchants to: However, if fees in China were similar to those in North America, adoption would presumably be much lower. To be sure, the incredible growth of ecommerce and mobile payments in China cannot be attributed exclusively to reasonable transaction fees. (There are approximately 100 million daily credit card transactions in the U.S. Thus the difference is clear: North American merchants are paying a lot more to process fewer transactions. The average card-present fee in North America is approximately 2.2 percent card-not-present is roughly 3.5 percent. China Union Pay, China’s most popular credit card, has an average merchant fee of 0.8 percent.Alipay, China’s second most popular payment app with usage statistics similar to WeChat Pay, has an average merchant fee of 0.55 percent.WeChat Pay’s average merchant processing fee is 0.6 percent. WeChat Pay, the most popular payment method, is accepted by 72 million merchants in China and claims to process over 1 billion transactions every day.Lower fees drive profits and investments.Ĭonsider the average fees a merchant in China can expect to pay for processing three popular payment methods. High credit-card fees motivate merchants to look for alternatives. I’ll address what that could mean for North American merchants in this post. Digital payments in China are equally innovative. In “ China Is Dominating Ecommerce,” contributor Marcia Kaplan addressed that country’s innovation in online shopping. ![]()
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