China leads global mobile wallet adoption
China has emerged as a frontrunner in mobile wallet adoption, with mobile wallets overtaking traditional payment methods such as cash and cards, according to a survey conducted by GlobalData, a prominent data and analytics company. The survey revealed that an impressive 84 per cent of respondents in China reported having a mobile wallet and actively using it, reflecting the widespread popularity and usage of mobile wallets in the country.
GlobalData’s 2022 Financial Services Consumer Survey highlights that the COVID-19 pandemic has played a significant role in accelerating the growth of mobile payments in China. Notably, the adoption rate in China surpasses that of developed markets such as the United States and the United Kingdom, where consumers still predominantly rely on cards for payments.
Shivani Gupta, Senior Analyst of Banking and Payments at GlobalData, explains, “China boasts one of the most mature mobile wallet markets globally. Mobile wallets have become mainstream payment instruments in China, widely utilized for day-to-day transactions at supermarkets, grocery stores, street vendors, public transport, as well as for online transactions.”
The high cost of point-of-sale (POS) terminals and the inadequacy of payment infrastructure have prompted both merchants and consumers in China to leapfrog from cash to mobile-based payments, bypassing the use of payment cards. Gupta notes, “Chinese consumers are significantly ahead of their Western counterparts in terms of mobile wallet usage. The availability of high-speed internet and the proliferation of smartphones laid the foundation for mobile payments to flourish. This was further supported by the extensive QR code infrastructure in the country and the growing preference for electronic payments among consumers and merchants.”
The extensive acceptance of mobile payments in China is largely driven by broad support from merchants, ranging from street vendors to major chains, who favour mobile payments due to their cost-effectiveness. Mobile wallets require lower infrastructure expenses, such as QR code stickers, and entail lower transaction fees compared to card payment systems.
GlobalData’s survey also reveals that in China, mobile wallets are predominantly used for the purchase of food and drinks, clothing and footwear, and electrical goods, underscoring the Chinese consumers’ comfort in using mobile wallets for everyday essentials.
While domestic mobile wallets like Alipay and WeChat Pay have been key drivers of the mobile wallet market in China, international solutions such as Apple Pay and Samsung Pay are making their presence felt in the country. Furthermore, the government’s endorsement of the e-CNY (electronic Chinese yuan) as the central bank digital currency will further bolster the growth of mobile wallets in China.
Gupta concludes, “China boasts a well-developed digital payments market. As consumers continue to embrace cashless payments, mobile wallet payments will continue to experience growth in the next five years.”
