If it wasn’t obvious already, mobile payments are central to Chinese consumer culture, and by extension Chinese tourists. The volume of mobile payments transactions in China skyrocketed again in 2017. 2016 saw around $9.3 trillion (58.8 trillion yuan). The first 10 months of 2017 easily blew past this figure with a total of approximately $12.8 trillion.
For the first 10 months of 2017, mobile payments transactions reached $12.8 trillion
Even without including the final two months of 2017, this is an increase of at least 38 percent for 2017 compared to 2016.
Moreover, the number of transactions made via non-banking mobile apps grew from 3.8 billion to over 97 billion from 2013 to 2016.
Of course, the vast majority of this transaction volume is for purchases made within China. Mobile transactions can be used for large retail purchases, purchases from street vendors, and sending monetary gifts to friends called hongbao (a popular practice associated with the Lunar New Year which is now available electronically through apps like WeChat).
Integrating Chinese mobile payment platforms is necessary for marketing goods and services to Chinese consumers
Still, this underscores that reaching Chinese consumers means adopting mobile payments, something most international firms and destinations have taken notice of. For example, Nestle is attempting to market its coffee offerings to Chinese tourists in Japan with an automated cafe in Tokyo, complete with robots. Patrons of course pay for their coffee with Alipay.
Chinese financial services company UnionPay, which primarily specializes in credit and debit cards, has also attempted to cash in on mobile payments and has released its own mobile payments platforms, UnionPay QuickPass and UnionPay QR Code, which are marketed directly to Chinese tourists.
At this point, for a destination or retailer hoping to attract Chinese tourist dollars, implementation of WeChat Pay or Alipay is not a “feature,” it’s a necessity.
Growth in mobile payments also helps the Chinese government in its battle against corruption
This is not just good news for mobile payment giants like Tencent and Alibaba. The Chinese government stands to benefit substantially from this growth in transaction volume. More mobile payments means that it will be easier for state bodies to track purchases and curb corruption.
China’s traditionally cash-oriented economy has made it challenging for the Chinese government to track purchases made with illicitly acquired money both at home and abroad. It’s in part for this reason that the largest Chinese banknote is only 100 yuan ($15.76). In the United States, on the other hand, the largest note typically used for everyday transactions is $100.
The Euro’s largest banknote denomination is €500. The €500 banknote, in particular, has been linked to corruption and terrorism.
The continued proliferation of mobile payments allows China to avoid or reduce the impact of many of these issues and provides much needed financial oversight for a government intent on cracking down on corruption.