Cash is not king in China. The popularity of mobile payments.

Over the last few years, mobile payment has sprung up in all Chinese cities as a preference over cash and cards. Mobile payments are used when people buy goods or services from various businesses ranging from street vendors, supermarket chains to fancy shopping centers. Electronic payments are mainly processed through China’s Alipay and WeChat Pay apps. By linking credit and debit cards with personal accounts on the two apps, people could transfer money and complete payments with a few taps of their fingers.

Image for post
Image for post

Mobile payment has become the way of life in China. Besides purchasing goods, users can take full advantage of the apps to pay utility bills as well as traffic fines, unlock shared bicycles that are ubiquitous in urban areas, pay for bus and taxi rides, book flight tickets, and make appointments at hospitals.

According to statistics released in early 2020 by the People’s Bank of China (PBOC) the number of electronic payments processed by country’s banks increased by 6.3% compared to the same period in 2018. 62.1 billion electronic payments have been registered, including 30.7 billion of mobile transactions, representing a year-on-year increase of 73.6%. In March 2020, 776.08 million persons were using mobile payment in China.

The massive adoption of mobile payment is believed to be linked to the tremendous growth of e-commerce and m-commerce as well as the use of QR codes which make fast and direct payment possible. In China, QR Codes are everywhere; even street musicians have a QR Code to collect money. There are two ways to pay via QR Codes in China:

  • The consumer scans the merchant’s QR code, which is normally printed and visible at the checkout, on restaurant tables and even on products in some stores. The customer then keys in the amount and sends the money directly to the seller.
  • The customer shows the QR code displayed on his smartphone, and the seller scans it. This method is even simpler and faster as the customer needs to do nothing but simply present the QR code to the merchant; it is up to the seller to select the amount that will then be deducted from the customer’s mobile wallet.

Unlike Apple Pay, where sellers have to buy technology to receive a payment, in China, a simple piece of paper printed with the QR code is enough.

Low transaction fees has also helped to drive uptake and increase volume. If the merchant’s monthly transaction volume is lower than a certain threshold, Alipay and WeChat Pay refund the commission, whereas merchants transacting above the threshold pay between 0.6 percent and 1 percent of the transaction value. This ensures that small businesses can use the service virtually for free, while it also creates fee revenue from companies who use the service a lot. Like person-to-person payments, merchant payments are free of charge for end customers, though consumers must pay a 0.1 percent fee when they withdraw amounts above a threshold from their e-wallets. This fee structure is designed less to generate revenue than to encourage users to leave funds in the wallet and spend them within the ecosystem.

The rapid development of mobile payment in China illustrates how quickly digital merchant payments can scale if providers get it right. To reach what China has achieved, countries need to have: a high level of bank account ownership, smartphone penetration, mobile internet access, and both financial and actual literacy.

With the rollout of digital Yuan in China’s major cities, more and more countries are investing in their own sovereign digital currencies for fear of being left behind in the next payment revolution. WadzPay will take the lead in this revolution and aims to become THE Transaction Layer for digital currencies.

WadzPay takes recognition of this mobile payment movement in China and other countries around Asia by offering QR and username-based payments, only requiring a smart phone and internet connection. We see ourselves as potential partners to service companies such as WeChat.

For more information on WadzPay visit www.wadzpay.com

WadzPay is a Blockchain-based payments platform for Digital Currencies. WadzPay anyone, buy anything, in any digital currency.

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store