Developing the Vision of a Cash-less Future #Wechat #MobilePayment

Nowadays, running out of battery is the only concern when leaving home, as an estimated 40 percent of China’s population now carries less than $15 cash equivalent in their pockets, according to one report. It all started when China's Internet users decided they preferred to go online via their mobile devices, and then went on to avail themselves of Alipay, the payments option of e-commerce giant Alibaba. Following suit, the ubiquitous Wechat app launched Wechat Pay to keep its 500 million user base hooked; soon after, the Chinese search engine Baidu also introduced its own version of the wallet. As the movement grew, the Chinese government pro-actively allowed banks to include the QR Code scanning system and process mobile payments, bringing a new expanding market into the mainstream. Working on providing transparency, China's central bank established a nation-wide clearing house for mobile payment services. This was necessary, according to analyst Wang Pengbo, as "the direct connection model bypassed the central bank’s clearing system, making it difficult for regulators to track and monitor capital flows, creating loopholes for money laundering and other irregularities." Thus, Internet enabled finance found space to grow while its consumers were shielded from any lack of transparency. Nearly 3 percent of China's non-cash payments were through the Internet anyway; now all online payment systems, banks, AliPay and others have been connected to a well-regulated, new platform since October 15. Starting from June 30, 2018, transactions will be routed via the new platform according to a deadline set by the People’s Bank of China. Unified regulations and a unified nationwide platform are invaluable for increasing consumer confidence and encouraging a swift changeover. Understandably, online payments multiplied 60 percent in the first quarter of this year to 47 billion transactions worth 26.47 trillion yuan, according to central bank data. This represented a 43 percent increase year-on-year. Within China, the smartphone is used to book taxis, buy cinema tickets and buy group discounts for meals. In fact, Wechat features a built-in version of taxi app DidiDache which is a lot like Uber or Careem. Not only that, the mobile payment system went on to support the business of bike-sharing as well. The possibilities seem simply endless in China and increasingly, a smartphone is all you need. Instead of credit cards, Alipay or Wechat Pay is in vogue, with Alipay currently dominating 54 percent of the mobile payments market. Touching a total of 963 million monthly active users, Wechat has become the ultimate professional means of communication. Visualizing the sheer impact of this major turnaround, it is significant that major cities in the world face losing out on the massive consumer market represented by Chinese tourists and executives if they don't adapt. Already this year, Japan and Hong Kong tried their best to offer the mobile payments option for Chinese mainland tourists during the Golden Week holiday. Following China, mobile payments are now more common in Japan, where the number of stores accepting Alipay doubled to 45,000 this year, as recorded by Alibaba. The U.S. is also gradually catching up, with a slow trickle of the pay-by-phone crowd now being spotted at various places. Mobile wallet or mobile payments services have been offered by Apple Inc.'s Apple Pay since October 2014. There is also Alphabet Inc.'s Android Pay and Samsung Pay from Samsung Electronics Co. In tandem, a system going by the name of CurrentC is being developed for use in retail joints and restaurants. Planning its own pay-service for shoppers, Wal-Mart will enable payments with credit cards or its own gift card using its existing smartphone app, while Target Corp. is also working on a mobile payments system. Nevertheless, American consumers remain uninspired by the concept as yet because of limited availability, it may be outside their comfort zone and they are fine with cash, checks, debit and credit cards. In Pakistan, many people do use the Wechat messaging app, but have little idea about its full potential. Having used the app myself, it is surprising to observe that most users here have no clue that, after signing up for WeChat Wallet and scanning the QR Code, the world can be literally at their fingertips. It is just a matter of time before Chinese Internet products and the facilities they provide go viral globally. In the coming years, future smartphones will be launched with standard mobile-payment technology and going online to make payments and conduct transactions may no longer be a matter of choice for most businesses or consumers. Sabena Siddiqui (Twitter: @sabena_siddiqi) is a foreign affairs journalist and lawyer based in Pakistan. Opinion articles reflect the views of their authors, not necessarily those of China.org.cn. Follow China.org.cn on Twitter and Facebook to join the conversation. ChinaNews App Download Print E-mail