Leapfrogging into the digital dimension

China has leapfrogged into the digital dimension to become the global center of financial technology innovation and adoption, outpacing the likes of New York, London and Singapore by a wide margin, according to a joint report by consultancy Ernst & Young and DBS in 2016.

Mobile wallets have grown into a lifestyle choice embedded into daily activities and interactions, as more Chinese embrace third-party services to pay credit card bills and run errands.

Alipay users in five municipalities and provinces made average transactions of more than 100,000 yuan ($14,705) last year, the company said in January.

Users in Shanghai topped the ranking with average spending of 148,000 yuan in 2016, 1.5 times that of 2015. In terms of total transaction volume, Guangdong province grabbed the top spot by claiming 16 percent of the payment pie nationwide.

Through Sesame Credit, a creditrating system embedded in Alipay, citizens of Hangzhou, capital of Zhejiang province, can freely borrow goods such as umbrellas and phone chargers throughout the city, based on their credit record.

The success of Hangzhou in going digital is inspiring other Chinese cities. “Smart cities are designed to be user-centric. We encourage the private sector to be an active part of it,” said Wu Hao, assistant director of the National Development and Reform Commission’s Department of High-Tech Industry.

According to Worldpay’s 2016 Global Payments Report, Alipay accounts for 44 percent of global mobile wallet spending and is on course to reach 60 percent by 2020.