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Another Look at Taxi e-Payments in Beijing and Shanghai
Beijing taxi drivers, like their counterparts around the world, are known for being willing to talk about anything and everything. But one thing you won't hear them say, at least not yet, is “用卡还是现金？” ("Will you be paying by cash or card?")
It's a question I heard often on a recent trip to Shanghai over the Chinese New Year holiday -- in fact, I was asked in every taxi I took. The card in question is the Shanghai Public Transportation Card (SPTC), the contactless payment card used in subways, buses, taxis, and other methods of public transport. One driver I spoke to in Shanghai estimated that 20 percent of his passengers paid with the SPTC. He wasn't sure why card payments were so popular but speculated that it was partly due to the popularity of the SPTC as a gift. Like any gift card, recipients tend to spend it more freely then they would their own cash -- in this case, splurging on a taxi instead of a bus or subway.
The gift card theory, while interesting, is probably a minor factor at best. Here in Beijing the Yikatong card serves a similar purpose as the SPTC, but while many Beijing taxis can accept Yikatong payments, I've never heard a driver here actually suggest that I pay with one. Last year one of my colleagues wrote about the difficulties of using Yikatong for taxi fares in Beijing and targeted an inconvenient reimbursement system for drivers as perhaps the greatest obstacle. From what I've seen, little progress has been made on that front. And as long as drivers keep up their tacit agreement to discourage Yikatong use, it's going to be cash payments as usual in Beijing's taxis.
Long Lines and Slow Transactions at China's Banks
Recently the well-known China blogger Imagethief posted a hilarious article about his frustrating experiences with Chinese banks:
"Surely no simple, retail banking transaction could take a freaking hour. But of course it could. I myself have been the jerk at the window on many an occasion, while some pensioner laotou at the head of the line pisses and moans loudly about drag-ass foreigners tying up the teller windows with their sketchy international transactions. It's not that I want the transaction to take forever. I have much better things to be doing than sitting at a teller window, like pulling out my own toenails with needlenose pliers or eating a sandwich made of Wonder Bread and used crankcase grease. But the system moves at the pace it moves at, which is roughly the same pace as continental drift. You know how in 150 million years the San Francisco Bay Area will be in Alaska? That's the exact same time your transaction will be complete."
A colleague of mine at Maverick China tackled a similar theme in March 2011 post as part of a series of payment-related experiences in Beijing:
Utility Payments - Self-service Kiosks and Queueing at the Bank
In my last post, I wrote about the prepaid and postpaid options available for utility payments in Beijing. Currently, the most common payment method is still to pay in person at a bank. While my own utility bills are included in my rent, I have made some payments at banks for my company.
A couple of months ago I was asked to pay the company's water bill. I went to a nearby branch of ICBC (Industrial and Commercial Bank of China) in the early afternoon, thinking it would be less crowded during off-peak hours; indeed, there were only eight people ahead of me in the queue. Yet somehow it took a full hour before it was my turn. Some of the people in front of me spent close to fifteen minutes at the teller window, asking about every single detail on their bill. There was also a landlord making payments for multiple properties at the same time. And these were just the bill payers! The others in line were making regular banking transactions, some of which must of have been fairly complicated, at least based on the time needed. What made it even more frustrating was that when it was finally my turn, the payment was every bit as simple and easy as I thought it would be and probably took no more than one minute to complete.
Payment Methods for Utilities in Beijing - Prepaid vs Postpaid
Every country has its own payment preferences for utilities such as electricity, gas, and water. The various methods can be generalized as either prepaid or postpaid. Back home in Singapore, postpaid is the preferred method; in Beijing, however, both prepaid and postpaid methods are common.
In Singapore, payment for all utilities is postpaid. The system is quite strict, however. Any late payment will add 1% to the next month's bill. If the bill remains unpaid yet another month, the service is simply shut down.
In Beijing, electricity is the most common prepaid utility. A co-worker of mine who lives in an apartment explained the process to me. After obtaining a card from the State Grid electric utility, he purchases electricity credits (generally done at a bank in Bejing) then slots the card into his home electric meter.
Public Transportation Payments in Shanghai -- Expensive but Efficient
I spent a recent weekend in Shanghai to visit the 2010 World Expo as well as the Bund, Xintiandi, and other well-known attractions. I took quite a few subways and taxis during this time, and I was able to compare Shanghai's public transportation payment system and Beijing's Yikatong system, which I have written about in previous posts.
Like Beijing, Shanghai uses a rechargeable contactless smartcard, called (fittingly) the Shanghai Public Transportation Card (SPTC), or Jiaotong Yikatong in Chinese. The basic workings of the two systems are fairly similar; the two most noticeable differences are the distance-based fare system and the significantly higher overall cost of subway travel in Shanghai.
Beijing's Yikatong Card, Part 3: Non-transportation Services
My previous two posts covered on Yikatong as a form of payment for the public transportation, including taxis in Beijing. Like the Octopus in Hong Kong and the EZLink in Singapore, Yikatong payment works for a growing number of non-transportation services as well. To get a clearer picture of how this service works, I tried to make purchases at a number of shops in Beijing.I chose several places near our office in the Dongzhimen neighborhood. All of them were listed on the Beijing Municipal Administration and Communications Card company's official site as being able to accept Yikatong for payment. Here are the results for the seven different stores I visited:
Beijing’s Yikatong and Singapore’s Ezlink: Payment for Taxi Fare
In my last post, I talked about Yikatong and Ezlink as a form of payment for buses and train rides. Both cards can also be used to pay for taxi fare. I have used this option a number of times in Singapore and tried (unsuccessfully) to pay with the Yikatong just last week.
My recent ride in Beijing was from Tsinghua University to Tiananmen Square (approximately 16km) and cost 60RMB (approximately $12SGD). One trip I paid for with Ezlink in Singapore was from my home in Jurong West to the Orchard Road shopping district (approximately 24km); it cost about $30SGD (about 150 RMB).
In both cases, the taxi drivers didn't really want to accept payment by transportation card. Both preferred cash, the most common form of taxi fare payment in both countries. The Singapore driver had no choice but to accept my card, as I did not have enough cash with me at the time. Here's my exchange with the Beijing driver:
Beijing's Yikatong and Singapore's Ezlink: The Growth of Contactless Payment
(I am currently serving a yearlong internship at Maverick China. This is the first in a series of blog posts on my own experiences with electronic payments in China.)
It has been almost a month ever since I arrived in Beijing. One of the first few necessities that I had to get was the Yikatong, a contactless payment card used primarily for payment on public buses and subways instead of cash. Singapore's version of Yikatong is called the Ezlink card. Below are a few observations drawn from my experience using both Yikatong and Ezlink.
One difference lies in the fares for both systems.
99Bill and China's new payment license rules
In our previous post about the new license requirements for third-party payment providers in China, we stated that we expected the largest companies to face little trouble in getting licenses. It is still unclear how the regulations will affect 99Bill, however. Just around the time the PBOC's statement was released, a 99Bill executive was arrested for transferring funds of over RMB 3 billion to an offshore gambling syndicate, according to a report (Chinese) by the Ministry of Public Security. 99Bill, however, has issued a response (Chinese) decrying what they describe as "media reports" and claiming that the man arrested is not a high level executive in their company. The details are still murky and it is not clear whether this matter will impact 99Bill's eligibility for a license. We'll continue to monitor the situation.
China Payment Regulations Announced - Implications and Analysis
On June 21, the People's Bank of China (PBOC), China's central bank and chief financial regulator, issued a statement stipulating that non-financial institutions will be required to obtain a license from the central bank in order to provide third-party payment services. This long-awaited announcement, which goes into effect on September 1, targets online payment providers such as Alipay, Tencent, YeePay, and 99Bill.
According to the PBOC statement, license applicants must meet the following key stipulations (for a Chinese-language list of all requirements and application procedures, click here):
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