Ride-sharing continues to gain popularity in China and across the globe, Didi Chuxing Science and Technology (Didi) is embarking on an ambitious expansion plan and needed to enhance the payment structure of its app to include an English interface as well as the ability to accept international credit cards. The solution will enable Didi to service over one million foreigners working and living in China, and over 28m visiting tourists annually. Certainly one to watch.

Solution worth watching in China

The challenge

As ride-sharing continues to gain popularity in China and across the globe, Didi is embarking on an ambitious expansion plan. As a first step, the firm is looking to tap into new demographic groups within China such as the short-stay foreigners, business travellers and tourists.

To cater for this market, Didi needed to enhance the payment structure of its app to include an English interface as well as the ability to accept international credit cards. While payments for Didi’s service are made via WeChat Pay and Alipay, its system only accepted credit cards linked to local banks. Since most foreign visitors do not hold domestic bank accounts, they were unable to make payments by credit card and enjoy the convenience of Didi.

The solution

To address the challenge, Didi outsourced the credit card payment collection process to a third-party multichannel merchant acquiring facilitator (merchant acquirer) that empowered Didi’s app with an English interface as well as the ability to accept payments by international credit cards.

But this upgrade added complexity to Didi’s account structure as it now needed capabilities to seamlessly settle payments across multiple international banks. It also had to integrate its system with that of the merchant acquirer’s. While Didi had to make final payments to its local drivers in renminbi, its merchant acquirer was processing funds in USD.

Didi appointed J.P. Morgan as one of its core cash banking providers to deliver an end-to-end solution, which it was able to do within the accelerated time frame of one and a half months. The solution includes:

• Integrating Didi and its merchant acquirer’s advanced ERP systems with J.P. Morgan’s ACCESS® Host-to-HostSM by leveraging ISO 20022 standards for full automation of Didi’s payment and collection cycles.
• Streamlining USD collections from its merchant acquirer and facilitating FX conversions and cross-border cash flow management between Didi’s offshore account in Hong Kong to its onshore account in China in RMB.
• Leveraging J.P. Morgan ACCESS® InsightSM to achieve real-time visibility and improved cost savings by replacing MT942.

Ally Liao, Group Treasurer explains, “In February 2017, we successfully launched an English version of our mobile app in selected cities in China, with the capability to accept payments via major international credit cards. The app will gradually be made available to another 400+ cities in China.”

Best practice and innovation

Didi needed to improve its mobile app by offering enhancements and new features to increase adoption rates among existing and new users. The company also wanted to ensure that the new features and payment methods would provide the consistent overall client experience.

With this in mind, Didi partnered with the bank to design and deploy a customised structure that offered high automation, enhanced visibility and controls for Didi to seamlessly realise their end-to-end cash clearing flow from user collection to final payments to drivers in different currencies. From the onset, Didi and the bank established a strong rapport as they facilitated discussions across multiple lines of businesses, and were able to complete the implementation process within one and a half months.

Liao concludes, “The new treasury structure will serve as a strong foundation for our expansion plans going forward.”