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Modern Era of Payments: Tradition Meets Innovation

The Lunar New Year is a festival that signals the beginning of the Chinese New Year. It is a time of celebration where elders and married couples give “red packets” to young, unmarried family and friends. Traditionally called hóngbāo, these red packets contain money in crisp currency notes that symbolize good luck and fortune.

Historically, red packets were wrapped in red paper or envelopes and given in-person at a celebration. As a tradition wrapped in subtleties and ancient folklore, the act of exchanging a red packet is more important than the amount of money given. Today, innovative financial technologies like mobile money leaders, Alipay and WeChat Pay, have revolutionized how people share red packets and remit funds into China.

The adoption of mobile money payments in China and the rest of Asia, where credit cards are still rare, is quickly gaining popularity. Many have adopted virtual red packets – commonly referred to as ‘e-hóngbāo’ – and mobile money transfer methods to conduct P2P transfers for personal and business uses, especially now in light of COVID-19 and social distancing laws.

As the 2021 Chinese New Year draws closer, many across the Asia region plan to virtually send red packets and gifts. The contactless nature of the virtual red packets enables consumers to continue the tradition of gifting their family, friends, and   network of colleagues and acquaintances as they celebrate the festival amid the ongoing pandemic.

Local banks receiving overwhelming demand for reservation of brand new currency notes typically used for red packets also encourage the use of virtual red packets in the upcoming Chinese New Year. Bloomberg Green shares that the hóngbāo tradition of gifting new bank notes generates the same level of emissions as charging 5.7 million smartphones for five days in Singapore alone. The Monetary Authority of Singapore supports the use of virtual red packets, sharing that the production of new currency notes during the Chinese New Year generates about 330 tons of carbon emissions every year.

Going by statistics, the gifting of e-hóngbāo seems to be on an uptrend that’s gaining more traction. Since 2012 when Alipay launched its digital red packet, the number of virtual red packets exchanged during the Chinese New Year has increased year-on-year. Other Asia top tech players have also implemented red packets into their platforms. WeChat launched its version during Chinese New Year in 2014,   Asian Internet companies Grab, Baidu and Weibo also have red packets.

To provide convenience and accessibility for consumers with family and friends in Asia, banks, financial institutions (FIs), large enterprises, and startups can tap on Nium’s existing partnerships to allow remittance of funds into the country.

Nium’s partnership with Geoswift, a global payments solution focused on facilitating cross-border payment solutions in and out of China, and Alipay, one of China’s largest digital payment platforms, enables consumers to make real-time cross-border remittances directly to bank accounts linked to UnionPay card accounts or the Alipay app.

Integrating Nium’s plug-and-play payments solutions eliminates the hassle of visiting physical bank locations to withdraw clean notes, and provides convenience, time, and cost-savings to businesses and individuals looking to remit money into China this season. This is especially useful now, in light of social distancing measures being implemented in many countries across the world. Those who can benefit from Nium’s offerings include:

  • Overseas consumers looking to send money to their loved ones in China
  • Businesses looking to make payments to workers or freelancers in China
  • Banks and financial institutions looking to offer their clients remittance service to China

Banks, FIs, enterprises, and individuals looking to partake in the celebrations and send red packets of appreciation to stakeholders in China and the Asia region can easily plug Nium’s API tools into their existing systems. Customers worldwide can send red packets and remittances into China in 40+ source currencies currently offered through Nium’s Send service, and recipients will receive their payouts in Chinese Yuan. Customers can also look to remitting these funds to the rest of Asia, as part of Nium’s Global Money Network.

Are you eager to participate in this year’s Lunar New Year celebrations? Do you conduct business with Asian stakeholders? Join the age-old celebrations this year, send or receive tokens of appreciation from your Asia stakeholders and consumers, and enhance your cross-border transfer experience with Nium’s real-time global solutions.

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