Power of billions gives Facebook digital payments opportunity
Digital payments are making a big wave worldwide - and Facebook could be ideally placed to capitalise.
Ryan Zheng, CEO of FinTech RiverPay, says popular Chinese lifestyle apps such as WeChat could be successful in the UK, with Facebook having the potential to evolve.
The co-founder of the Canada-headquartered digital payment solutions firm says the social media platform could leverage its huge user base.
“[Digital payments are] definitely revolutionising how cards or paper money are being used, and merchants are getting used to someone popping up a phone and scanning a barcode to pay instead of pulling out a credit card,” said Zheng, who had a marketing background before starting the company.
“Currently I haven't seen a product focus on that area from Facebook or in the UK, but they do have a very strong user base they can leverage and any product they potentially release on Facebook already has billions of users. They definitely have that opportunity.”
Established in 2017 in Toronto, the company has become a middleman for many UK and worldwide brands so they can accept popular payment types from China, to allow anyone with those payment types to skip the exchange rates and pay directly.
Brands that have adopted the digital payment system include Harrods, Selfridges, Prada and Holland and Barrett.
“For Harrods, they have a very strong brand awareness among Chinese consumers already, so when Chinese tourists come to London it's one of the icons to go to and do a lot of shopping. Based on that we solved the pain of payments,” said Zheng.
Chinese payment methods such as WeChat, Alipay and UnionPay can be accepted straight at the till, instead of consumers having to exchange their currency to pounds, call their bank or, potentially, have their card rejected.
“Some Chinese customers might have classic cards like people in Britain, however the penetration is not as high as the western world with plastic cards.
“The exchange rate when they use their Chinese issued credit card is quite expensive. Typically a credit card issued outside of the UK is looking at almost three per cent for exchange fees that will go on your bill.
“For the merchants, they also face 0.8 to 1.5 per cent for a foreign card assessment fee. Right away they're looking at three to four per cent wiped away by the financial institution to be able to spend that card at all.
“With our digital wallet solution, they can use the most popular mobile payments they already use in China - they no longer face any of those fees because it's almost as if they're making a transaction in China.”
The firm now serves more than 15 countries in Europe and North America. It also acts as a marketing tool for its connected brands by advertising material across the lifestyle apps before, during and after a tourist’s trip to the UK.
RiverPay recently opened a London office in Covent Garden and aims to expand this and their distribution network over the coming year, with deals in the pipeline with ‘major retailers and restaurant chains’.