Alipay and WeChat Pay account for 93% of China’s mobile payment market
In just 70 years China has moved from a simple coupon exchange system for goods to the world’s most sophisticated mobile payment technology used by over 90% of consumers in China’s largest cities
30 September 2019 | (Staff Writers and China.org.cn)
Throughout its 5,000-year history China has gone through enormous periods of change, few could argue that any period could challenge the developments of the past seven decades. Modern day China pulled hundreds of millions of people out of poverty into the middle class and, since the founding of the PRC in 1949, national economic output has increased by more than 450 times.
The nation’s increasingly urbanized population has one of the fastest uptakes of new technology seen anywhere in the world, seen through the use of mobile devices, online purchasing and the rise mobile payment systems.
Bartering was the earliest trading system in China, allowing people to get what they needed. Natural shells became the earliest form of currency in China about 3,600 years ago.
After the founding of the PRC, due to a shortage of goods, the central government had to issue ration coupons to limit consumption of grain, cloth and other necessities. Both the ration coupon and cash were required when a purchase was made. In those years, having those coupons but without money could make life easier than having money but without the coupons.
When market supply gradually became sufficient after the implementation of reform and opening up in 1978, cash was the main payment tool for the Chinese consumer, as cash on delivery made them feel assured. Ten yuan had been the largest value banknote until 1988 when the 100-yuan note was issued.
The Bank of China Card, China’s first credit card, came into being in 1985. Subsequently, credit cards and debit cards entered people’s life in the 1990s, but the majority of Chinese still preferred paying with cash. While credit card payment remains dominant in other countries, the Chinese quickly skipped over it to embrace a new era for payments.
With the rise of the Internet, online shopping arrived on the scene. On November 11, 2018, China’s Double Eleven shopping carnival, the total online retail transactions exceeded 300 billion yuan.
The proliferation of mobile payments nowadays has enabled the Chinese with a smart phone to go around without a wallet. Mobile payments are ubiquitous, paying utility bills, topping up a game account, booking a train ticket, paying fines… even buying some tea eggs and pickles in the most remote rural areas.
Mobile payment technology has not only made shopping convenient and fast; it underpins the growth of China’s massive e-commerce sector. These advances have important global economic ramifications, not simply for exporters selling to Chinese consumers but for the fact that the services sector will underpin much of China’s future economic growth.