In China, cash is rapidly becoming obsolete. Nowadays Chinese people can go by with only 100 RMB (about $15) in cash for more than one month due to the rise of mobile payment. Whether you want to grab a breakfast at a food truck, hail a taxi, unlock a shared bike, pay for utilities, or reward a busker, mobile payment is always there for you.
From 2016, the e-commerce-driven mobile payment has widely expanded to physical retailers like supermarkets, restaurants and clothing stores as well as emerging industries such as ride-hailing, bike-sharing, and food delivery. Many internet financial services such as peer-to-peer lending and online money market funds have incorporated mobile payment service as well.
One reason for China’s rapid adoption of mobile payments is that China does not have an entrenched credit card culture compared to U.S. and other regions. According to People’s Bank of China, the number of credit cards per capita is only 0.31 compared to 2.35 in the U.S. It leaves spaces for internet behemoths like Alibaba and Tencent to enter into the mobile payment market. In 2017 Q2, they’ve together accounted for over 94% of the market share.
The domestic battle has even extended abroad. Alipay and Tenpay are now targeting the 120 million Chinese who travel overseas annually and have started the partnerships with companies from Southeast Asia and Europe. They plan to penetrate their payment service in more countries in the future.
With both strong domestic and international demand, China is no doubt the mobile payment giant in the world. The mobile payment in China handled 58.8 trillion RMB (nearly $9 trillion) transactions in 2016, which is almost 90 times the size of the U.S.'s $112 billion, according to Forrester.