Ever since China’s reform and opening up strategy took place in last century, Chinese commerce world has been seeing and enjoying a boom envied by its neighbors, exemplified by the flourish in commodity markets and emergence of numerable self-employed businessmen. According to a stats, there’re more than 60 million such businessmen across China actively engaging in the trade of selling things from a rented storefront.
You can find literally everything, everything in those tiny storefronts which usually take up from several to dozens square meters. Varied style of clothes, food, drinks, household items, you name it.
For quite a long time, shopkeepers of those stores take only cash for Chinese are more likely to walk around carrying Renminbi in their pocket as credit card wasn’t a commonplace over the past decades. Things have changed though, Chinese banks have been issuing zillions of debit card and credit card and Chinese people now are more receptive to the idea of charging a plastic card.
However, those small vendors weren’t catching up fast enough to cope with the change. It’s said that at least one out of every twenty seven deals is compromised because the vendors were not equipped with POS.
Get POS is not as easy as get yourself a mobile, you’ll need to file an application with a bank (it takes time), be willing to cover the cost (thousands RMB for each) and then allow banks to take between 1% and 2% from every transaction.
The tedious and sometimes twisted application procedure and costs are two of the many causes stopped vendors from getting a POS from banks.
Chinese mobile payment startup QFPay spotted the opportunities behind the untapped market and decided to come to a play. Especially when Square has already made much progress in the same field across the Pacific.
Founded in early last year, QFPay is staffed by a combination of hardware engineers, software developers and BD people. Tech people accounted for more than half of its total headcount of 80.
It launched the first version of QFPay POS terminal and, according to Tim Lee, the company’s COO, was well-received among clients, mostly are self-employed small businessmen. Figures gave out by the company showed in the first six months after the debut of the first version of QFPay terminal, it processed more than RMB 200 million that came from charging 160k bank cards in 280k transactions. As of now, there’re about 10k Chinese local merchants using QFPay device to power up their business, while about 30%, or 3000+ of them are apparel sellers. QFPay is targeting at north of 100k clients by the end of next year.
Using QFPay to charge a customer is a no-brainer task, just connect the terminal to a smartphone that installed QFPay app, swipe a bank card with the terminal, input the password on the terminal, and then it’s all done. QFPay terminal costs RMB 699 for the time being and is accessible to anyone in need. Tim also said that QFPay employs bank-level encryption to ensure security, so it’s supposed to be as secure as any standard POS machine.
Open and Change
Recently, QFPay debuted a revamped version of its terminal, making it smaller, lighter, and most importantly, more open.
Tim told me in an interview that they’ve made more than 200 changes to the new terminal and app covering the mainstream platforms including iOS, Android phones and tablets, Windows XP/7/8 and so on.
By ‘Open’, QFPay got started opening its infrastructure to outside developers to foster and host 3rd party apps in an aim to add more features to QFPay’s core and basic function of merely charging cards.
The addition of an App Hub to QFPay app, presents vendors with more options to streamline, empower or even entertain their daily work. For example, you can get first-hand and fresh industry news by installing a new app from the App Hub, you can share every deals on Weibo (maybe under consent from the customers involved), you can also transfer money among your cards (it claimed that vendors would love this feature).
In addition to this, QFPay also gave a lot of thoughts to how to help vendors better leverage on their transaction data. The redesigned app could give merchants better sense of their transactions in every business day. It’s very easy to export transaction data into visualized charts.
Currently, Chinese mobile payment market has been seeing cut-throat competition with many players competing for an immature market, including Lakala, QFPay, iBoxPay, ChinaPNR as well as established industry giants like Alipay. The industry is still in the phase of educating market and consumers and is still far away from the harvest season, given that, winning as many clients and moving as fast as one can is critical to future success, whoever lasts in the competition, has a better chance to survive.