Cash­less trend gets a big push

Pay­ment plat­forms run pro­mo­tions to boost vol­umes

China Daily (Hong Kong) - - FRONT PAGE -

WeChat and Ali­pay, two ma­jor on­line pay­ment plat­forms in China, call for con­sumers to go cash­less and card­less in their daily life through pro­mo­tions in Au­gust. Cash­less­ness is a new Chi­nese char­ac­ter­is­tic. In a re­cent re­port by Ten­cent, the Chongyang In­sti­tute for Fi­nan­cial Stud­ies at Ren­min Univer­sity of China, and French mar­ket re­search firm Ip­sos, 84 per­cent of Chi­nese were “com­fort­able” go­ing out with only mo­bile phones, no cash.

Gao Jing­wen, in her 20s, can hardly re­call when she last paid in cash.

“I do not need cash in a restau­rant, see­ing a doc­tor, pay­ing elec­tric­ity and wa­ter bills. I can­not think of any place I can­not pay with my smart­phone,” she says.

Zhang Shu­cui, 67, al­ways used to take a large amount of change when go­ing to the wet mar­ket near her home in Bei­jing’s Haid­ian District, but that time has gone.

“The QR code re­placed the change bas­ket in front of the stalls,” she said. “Gone are the days when I had to search all my pock­ets for a coin.”

Mon­day’s re­port also showed more than 70 per­cent of the 6,500plus re­spon­dents say­ing they could live more than a week with only 100 yuan ($15) in cash, and 52 per­cent only use cash for 20 per­cent of their to­tal monthly con­sump­tion.

Mei Houdui, an elec­tronic prod­ucts dealer in Shen­zhen, shared a re­cent “awk­ward” ex­pe­ri­ence — he wanted to bor­row some cash as pocket money for his child at a party, and failed as no one had any cash in their pock­ets.

A big cake

The new pay­ment pat­tern has won over Chi­nese con­sumers with its con­ve­nience and flex­i­bil­ity, squeez­ing the mar­ket share of card and cash pay­ments.

Ali­pay or WeChat? This is the most often ques­tion posed up when a pur­chase is made in China. Cards and cash, the once dom­i­nant pur­chas­ing meth­ods, have be­come a sec­ond op­tion in less than half a decade.

“Mo­bile pay­ment com­pa­nies were wor­ried about their fu­ture just four years ago, but the spread of tech­nol­ogy has ex­ceeded the imag­i­na­tion of al­most ev­ery­one,” says Li Gang, a pro­fes­sor at the Ten­cent Re­search In­sti­tute.

Data from the Peo­ple’s Bank of China showed a to­tal of 157 tril­lion yuan of pay­ments were made on mo­bile de­vices in China last year, more than 200 times that in the United States in the same pe­riod.

The fig­ure is ex­pected to con­tinue ex­pand­ing by 50 per­cent each year, it said.

No big sur­prise

It is no ac­ci­dent that mo­bile pay­ment have ex­panded so fast in China. Ac­cord­ing to a re­port by eMar­keter, China’s lack of “credit card cul­ture” has some­what fu­eled the pop­u­lar­iza­tion of mo­bile pay­ments, es­pe­cially in small cities and un­der­de­vel­oped ar­eas.

In a re­mote moun­tain vil­lage of cen­tral China’s Hu­nan province, one can eas­ily buy a hen or gro­ceries by scan­ning a QR code.

Pay­ment and Clear­ing As­so­ci­a­tion of China said in a re­port that mo­bile pay­ment users in small towns and the coun­try­side ac­count for half of the to­tal in China. The per­cent­age of mo­bile pay­ment users in the coun­try­side is even higher than in pro­vin­cial cap­i­tals.

“Mo­bile pay­ment has be­come the norm and com­pa­nies and brands can­not af­ford to ig­nore that fact,” says Li.

WeChat Pay has re­cruited sev­eral mil­lion off­line ven­dors. Ali­pay an­nounced 10 mil­lion brick-and­mor­tar shops have signed for their cash­less life pro­mo­tion.

Mo­bile pay­ment has also helped im­prove the out­dated, time-con­sum­ing ser­vices at gov­ern­ment of­fices and pub­lic sec­tors.

In Xi’an, nearly 70 per­cent of the north­west­ern city’s drivers pay their traf­fic fines via WeChat in­stead of wast­ing time queu­ing in long lines in po­lice de­part­ments.

Pa­tients in Guangzhou are used to mak­ing an ap­point­ment with a doc­tor and pay­ing by smart­phone.

Statis­tics from WeChat showed that over 300 cities have pub­lic ser­vice plat­forms that ac­cept WeChat pay­ments.

Both the in­ter­net giants have ac­tively ex­panded their ser­vices over­seas since last year. Ali­pay can be used in sev­eral hun­dreds of thou­sands of shops in over 70 coun­tries, while WeChat has landed in 19 coun­tries and re­gions, in­clud­ing Ja­pan, Thai­land and Repub­lic of Korea — most pop­u­lar des­ti­na­tions among Chi­nese tourists.

“The door to a new world has opened, and an in­fi­nite fu­ture awaits,” Jia says.


China’s lack of “credit card cul­ture” has some­what fu­eled the pop­u­lar­iza­tion of mo­bile pay­ments, es­pe­cially in small cities and un­der­de­vel­oped ar­eas.

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