Low credit card usage, and increasing popularity of eCommerce coupled with a growing middle class in China have accelerated the growth of mobile payments in the country.
China has also seen an increase in cross-border payment transactions, primarily due to growth in sectors such as eCommerce, travel and overseas education. Frost & Sullivan recently reported that nearly 65% of Chinese tourists have used mobile payments abroad, approximately six times higher than the average non-Chinese traveler.
“In China, eCommerce is a powerful incentive for users to purchase smartphones that enable mobile payment features. The social aspect that mobile payments brings can serve as an integral step in building trust and learning about digital services, especially in rural communities,” said Ms Mei Lee Quah, Industry Principal Analyst, Information & Communication Technologies (ICT) Practice, Digital Transformation at Frost & Sullivan.
The market of mobile payments services in China is expected to grow at a compound annual growth rate (CAGR) of 21.8% from 2017 to 2023, growing three-fold from US$29.93 trillion to US$96.73 trillion. The total number of active mobile payment customers is expected to reach 956 million by 2023 from 562 million in 2017 which will attract additional investments from mobile payments market participants.
Frost & Sullivan’s recently published report, Chinese Mobile Payments Services Market, Forecast to 2023, highlights the growth opportunities presented in the market, namely:
- Rural region penetration
- Addressing the elderly market
The report also offers detailed analysis of the mobile payment market in China with a focus on key market players such as AliPay and WeChat Pay, and their business and revenue models. The Chinese market for mobile payment offers not only market opportunities for solution providers intending to operate within the domestic market but also learning points for global mobile payment solution providers.
Frost & Sullivan predicts that China will continue to be a major player in the global mobile payment services market and service providers in the country will continue to focus on improving and enhancing security on mobile payment platforms.