Taxi Station sign

Chinese Taxis Could Provide Mobile Payment Growth

taxi, mobile payment, app, china, chinese, alibaba, tencent, wechat, didi dache, kuaidi dache

Rival Chinese internet companies are going toe-to-toe with different taxi hailing apps in an effort to dominate mobile payments

Alibaba and Tencent – two of China’s biggest internet companies – have been facing off with each other by proxy of taxi hailing apps.

Already Tencent has invested in a mobile payments platform through WeChat, but now its headed out and backed Didi Dache – while Alibaba is backing the likes of Kuaidi Dache.

It may seem odd that two big internet companies think that they can make their millions with mobile payments through the likes of taxi hailing apps like HailO or Uber. But when you look into how China navigates its cities, taxi’s are becoming popular due to the immense levels of congestion on the roads, and the fact that some drivers flat-out refuse to go down some routes. Taxi apps like Didi Dache and Kuaidi Dache mean that taxi drivers may be far more open to the idea of taking someone down these expensive fare routes, and it opens up a rather lucrative avenue for both Alibaba and Tencent.

It seems to be working too, as media professional Sam Sun said to The Financial Times: “cab drivers have been telling me to pay via WeChat because it now rewards drivers and passengers Rmb10 on each ride.” The fact that drivers are actively encouraging payment through an app, rather than through hard cash, is a telling sign that these Chinese businesses want such a service to come. It’s also a sign that Tencent’s offering seems to be rather popular in that space – just like its Hongbao app.

Mobile payments in the region aren’t sluggish though, in the first half of 2012 and 2013, mobile payments nearly quadrupled to Rmb130bn ($21.4bn).

Alibaba’s mobile payment applications are hoping to be far larger than just taxi fares. Utilising its Alipay system, Alibaba hopes that users can expand beyond the 40 cities they can order taxis in and allow Chinese travellers to buy airline tickets and pay for food at Chinese restaurants in the US.

It’s an uphill struggle as Tencent has done very well in mobilising it’s WeChat users into using mobile payments through its system. In fact, nearly 300 million users book and pay for cabs on Didi Dache a month.

Either way, it’ll be interesting to see how the mobile payments market plays out in China.

[Image: Richy! - Flickr]

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