Chinese mobile payment volume has more than doubled to USD$5 trillion in 2016, according to Analysys data cited by Hillhouse Capital. Mobile payments continue to grow rapidly in mainland China. The dominance of mobile transactions lends itself to greater
Chinese mobile payment volume has more than doubled to USD$5 trillion in 2016, according to Analysys data cited by Hillhouse Capital. Mobile payments continue to grow rapidly in mainland China. The dominance of mobile transactions lends itself to greater data collection by the Chinese government.
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Mobile payments are taking China by storm and changing the face of daily commerce.
When eating out or shopping with local friends, payment is made by scanning a QR code on the restaurant’s table or by presenting a similar code on a smartphone to the cashier. Spice shops, museum souvenir stores and sellers of traditional Chinese calligraphy brushes all have signs posted advertising that they accept mobile payments.
Rather than, “Do you accept credit cards?” the new question has become “Do you accept Alipay or WeChat Pay?” The running joke is that even street beggars would rather take a mobile donation than cash.
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Photo: CNBC
Lack of red tape and a less developed financial system have apparently allowed mainland China to leapfrog the developed world into embracing mobile payments.
Mobile payment volume in the country has more than doubled to USD$5 trillion in 2016, according to Analysys data cited by Hillhouse Capital in a report put out in May of this year. In the first quarter of 2017, Alipay had 54 percent of the mobile payments market, with WeChat Pay accounting for 40 percent.
The Chinese mobile payments habits are also affecting other countries. More than six million Chinese citizens traveled abroad during the Golden Week national holiday in early October, according to state-run media outlet Xinhua. That puts pressure on popular tourist destinations like Japan and Hong Kong to add mobile payments to their service options.
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The growth of mobile payment in China comes off a solid base of smartphone users. The ubiquitous WeChat messaging app from Chinese technology giant Tencent reached 963 million monthly active users in the second quarter of 2017. In professional settings, adding each other on WeChat is beginning to replace more traditional business card exchanges.
Alipay, which is owned by Alibaba affiliate Ant Financial Services, has 520 million users, according to its international website.
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Photo: Asia Times
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The growth of mobile payments in China has supported another business: bike sharing.
Led by a few startups, the number of bikes stacked along the side of the street or sometimes scattered alongside highways in China has exploded. The number of monthly active users has doubled from February to more than 20 million in March, according to TrustData cited by Hillhouse Capital.
Two of the largest Chinese-based bike-sharing startups, Ofo and Mobike, say they have a combined 13 million bikes around the world and have each raised at least USD$1 billion.
The bike unlocks after the customer scans its QR code through a bike-sharing app. Photo: CNBC
The bike unlocks after the customer scans its QR code through a bike-sharing app. Photo: CNBCThe dominance of mobile payment also means companies like Ant Financial and Tencent have access to troves of personal data. That data can then be shared with the Chinese government, which prioritizes control. Some parts of China have been testing a personal credit score system linked to mobile payment data.
But unless privacy issues have immediate negative consequences, convenience may trump all. A smartphone is increasingly the only thing someone in China needs to take with them when going out.
