Mobile app adopts incentives idea

In an effort to lure UK Christmas shoppers and compete with digital rivals, the marketing minds at Google have cooked up a new scheme for the company's mobile payment app Android Pay－and the promotion has a distinctly Chinese flavor.

Through the "shop.tap. reward" feature that ends Dec 31, every time a customer pays via Android Pay in UK stores and at turnstiles on the Transport for London network, they will receive a "virtual Christmas cracker" that potentially contains one of 100,000 gift cards. Among prizes are Costa Coffee coupons worth 10 pounds ($12), Odeon cinema tickets, and 500 pound ($617) vouchers for department store House of Fraser and electrical retailer Currys PC World.

While the marketing ploy may look fresh to UK consumers, Chinese mobile payment users will notice similarities between the "shop.tap.reward" scheme and the digital "red envelope" coupons that Chinese mobile payment platforms have offered customers for around six years.

In the annual "red envelope wars," mobile payment competitors, including Tencent's WeChat Wallet, Alibaba's Alipay, and Baidu's Baidu Wallet, have offered billions of digital coupons to app users during shopping holidays since 2009. That promotion is a nod to the cash-stuffed red envelopes Chinese people exchange during the Lunar New Year.

During the holiday in February 2016, WeChat distributed 32.1 billion virtual "red envelopes". Tencent's apps made up about 17.4 percent of the mobile banking market in 2015, according to a report from Big Data. With around 450 million monthly users, Alipay has the largest share of the mobile payment market, handling around half of the estimated $738 billion Chinese consumers spent online last year.

Since its UK launch in July 2015, customers at most major banks have been able to use Apple Inc's Apple Pay, while UnionPay credit and debit card users in China have been able to make purchases via the app since February. In October, Android Pay launched in Hong Kong with Visa and Mastercard customers from Standard Chartered, HSBC, Dah Sing Bank, Hang Seng Bank, DBS and the Bank of East Asia taking part. Android Pay launched in the UK in May and has been picked up by most major banks, except Barclays, which has created its own mobile banking app.

Android Pay's "shop.tap. reward" scheme also provides users with a digital coin every five taps, and five coins earn a user a £3 Costa Coffee gift card. Google also announced this month that an Android Pay button has been added to the updated Uber app, while Transport for London users will receive information that will help them claim refunds from the transport service.

Dai Tian in London contributed to this story.