What is UnionPay?
UnionPay is a financial services institution headquartered in Shanghai, China. It mainly provides inter-bank payment and settlement services and has its own online inter-bank transaction clearing system.
In August 2021, China’s payment industry made great moves! The CBN（China Business Network) learned that after accessing the transaction settlement in Taoba app, UnionPay is now also linked with WeChat payment. Users can scan the WeChat money collection code through UnionPay app to complete their payments. However, the UnionPay and Taobao app integration is still in the beta version. (only certain users can test this function).
Nevertheless, in the view of the payment industry, the integration of UnionPay with WeChat and Taobao can be described as great progress in the interconnection of barcode payment, which could provide a great convenience for the payment process and transaction settlement for both end-users and merchants. At the same time, for the payment industry, once the barcode payment is truly integrated, the 3rd party aggregation payment institutions will need rapid transformation, since the direct demand of merchants of 3rd party aggregation payment might decline.
UnionPay has already built a connection with WeChat payment. The users can make payments by scanning WeChat personal payment collection code through the "scan" function in UnionPay app.
The cooperation between WeChat payment and UnionPay was also confirmed. However, we noted that the current connection between UnionPay payment and WeChat payment only achieved the one-way payment scanning WeChat payment collection code, while WeChat to UnionPay collection code function has not been released yet.
To some payment industry leaders, the integration between UnionPay and WeChat payment actually makes WeChat Pay more open to the UnionPay market and the banking institutions so that more small and medium-sized payment institutions are able to participate in this huge payment processing business. It is conducive to the innovation and fair competition of SMEs. Only the ones with technical ability, high-quality service and experience can stand out from this market competition and further evolve the industry.
For UnionPay, directly scaning WeChat QR code and Taobao payment code opens up more actual usage scenarios. In the future, The integration breaks the ice from UnionPay since there will be no more direct competition with the two payment giants (WeChat Pay and Alipay), which closed the gap between the two sides, and it will create a win-win situation for every player in the market.
The argument between barcode and QR code payment often happened in recent years with the intensification of competition in the third-party payment industry.
In order to solve this problem, the interconnection of barcode payment has been mentioned. At the end of 2016, UnionPay issued the QR code payment standard, which is intended to realize the "one code standards" among banks and to lay a foundation for the interconnection of 3rd party payment and inter-bank barcode payment.
The consensus in the industry is that in the face of a wide range of QR code payments in the market, interconnection will provide a great convenience for payment and settlement of merchants and users, help merchants reduce the cost of having multiple payment terminals and reduce social transaction costs to a certain extent.
On another hand, Incomprehensible barcode payment experiences created by various mobile payment institutions also caused bad experiences for the consumers. This is why UnionPay and the industry does urgently need to provide a unified barcode payment solution for the industry and to give the consumers a better user experience in the domestic market.