Daniel Slotta
Research expert covering Greater China
Digital payments in China - statistics & facts
While many countries still struggled to promote mobile payments in response to the COVID-19 pandemic, China was already leading the rest of the world in building up a cashless society. The country was leading in user numbers and penetration rates and more than half of the Chinese population uses mobile payments each quarter. Over the years, Alipay and WeChat Pay have ruled the online payment market in China. The country's vibrant FinTech industry also brought about a flourishing e-commerce sector.
Through mobile payments and e-commerce platforms, rural residents not only have access to a broader range of products but also have new sales channels for their locally produced goods. Despite China’s economic and social development, many villages are still very remote and lag behind in living standards and infrastructure development. Via online retail, people can buy many articles that were previously hard to come by. Popular items include clothes and footwear, as well as daily necessities. At the same time, villagers have utilized China’s large e-commerce platforms to market their locally produced products directly to consumers all over the country.
After QR codes, facial recognition and palm scans are the latest mobile payment methods in China. Many shopping malls, restaurants, and public transport systems offer these payment methods. Proponents claim that these methods are not only more convenient since they don’t require any device. In addition, they would also enhance security, which is one of the leading concerns of Chinese mobile payment users. Despite these claims of enhanced convenience and security, face and palm identification also bring about significant privacy risks that providers have to address.
From cities to villages
Digital payments have not only been accepted by the tech-savvy middle-class from big cities. It has also changed the lives of rural residents and small business owners. In 2020, more than 20 percent of Chinese mobile payment users were from counties, townships, and villages. The availability of mobile payments gives many people in rural areas access to financial services who had previously been outside the reach of traditional banking infrastructure. It has changed the lives of many rural residents and opened access to new income sources.Through mobile payments and e-commerce platforms, rural residents not only have access to a broader range of products but also have new sales channels for their locally produced goods. Despite China’s economic and social development, many villages are still very remote and lag behind in living standards and infrastructure development. Via online retail, people can buy many articles that were previously hard to come by. Popular items include clothes and footwear, as well as daily necessities. At the same time, villagers have utilized China’s large e-commerce platforms to market their locally produced products directly to consumers all over the country.
Face, Palm, and Finger: The User Becomes the Wallet
In many countries, mobile payments use NFC technology in the smartphone or the smart wearable, both of which are linked to a bank or credit card. In China, however, payments are handled by a third-party service, such as Alipay or WeChat. The preferred method for identifying the other party in order to send or request payments was the QR or bar code. The provider in the background would then process the transaction.After QR codes, facial recognition and palm scans are the latest mobile payment methods in China. Many shopping malls, restaurants, and public transport systems offer these payment methods. Proponents claim that these methods are not only more convenient since they don’t require any device. In addition, they would also enhance security, which is one of the leading concerns of Chinese mobile payment users. Despite these claims of enhanced convenience and security, face and palm identification also bring about significant privacy risks that providers have to address.
