china mobile payment

The rise of mobile payments in China

Today almost all of the headlines are about Apple's iPhone launch and that is well deserved. I've been a iPhone user myself for 10 years and am excited for the new phone (but not the rumored $1000 price tag). Since the iPhone news will be covered by a million different sites, let's look at the other side of the globe where China is a very different market and one changing at breakneck pace. Did you know that last year, Chinese consumers spent $5.5 trillion (yes Trillion) through mobile payment platforms? To put that in perspective that's about 50 times more than their American counterparts where Apple pay just hasn't caught on. So why is China succeeding where Apple is not? Let's take a look at China's mobile payment market.

The move to cashless society

In the US, people's preferred method of payment is credit card. We are used to carrying plastic in our wallets and don't mind running up some debt. Credit cards haven't taken hold the same in China and that has allowed mobile payments to step in to fill the payment gap. For the most part, Chinese are linking their bank card (ATM/Debit) to their mobile app to make most of their purchases.

In a recent study called "2017 Mobile Payment Usage in China," more than half of WeChat users said they conduct less than 20% of their monthly transactions in cash. Furthermore the study found that WeChat users said they only pay with cash when no other payment methods are available (73%) or during small transactions (46%). Empty pockets are the new fashion with 40% of Chinese carrying less than RMB 100 cash (roughly $15) in their wallet -- and for the majority, RMB 100 can last up to a month.

Service industries lead the way

mobile service usage.jpg

This chart shows how much mobile payments dominate the Chinese lifestyle and how little credit cards come into play. Service industries like dining, retail, entertainment and travel are the areas that excel in mobile payments. This type of payment is so ubiquitous that 40% of food stand transactions are by mobile. In retail, 68% of merchants accept mobile payment methods with similar penetration in supermarkets and malls.

China is clearly leading the way in mobile payments and that will continue well into the future. The two leaders in the space are WeChat (Tencent) and AliPay (Alibaba). They are the giants in the sector and will dominate for years to come.


"WeChat Pay and AliPay" by VictoryKm is marked with CC0 1.0

Share This Story, Choose Your Platform!

About the Author: Chris Wang

Chris Wang


Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Runnymede Capital Management, Inc.-"Runnymede"), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Runnymede.  Please remember that if you are a Runnymede client, it remains your responsibility to advise Runnymede, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Runnymede is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the Runnymede's current written disclosure Brochure discussing our advisory services and fees is available for review upon request. Please Note: Runnymede does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Runnymede's web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

Search Website

Annuity Review Database

Follow Our Podcast

Google Podcasts
Apple Podcasts

Recent Posts