China Digital Byte series
Extending well beyond payments
Mobile payment in China's digital age
Finally, the era of mobile payments?
We may have finally reached the highly anticipated mobile payment
(m-payment) revolution. With worldwide m-payment transactions projected
to reach US$721 billion by 2017, it has already started to impact both the
online and physical retail experience.
Yet m-payment is not about replacing cash, and potentially it is not even
about payment itself. Instead, it can unlock the key to much bigger revenuegenerating opportunities such as targeting behaviour for product sales
resulting in refined loyalty programmes and better customer insights.
According to PwC's recent mobile wallet survey report, more than 50% of
respondents would like to get loyalty discounts and coupons instead of
paper-based marketing materials at checkout when using a mobile wallet to
Yet, the evolution of m-payment has been slow, and in many cases driven by
countries with consumers that lack a bank account rather than those
countries with strong banking infrastructure and digitally-savvy customers.
The reasons is clear: creating payments where there is little infrastructure is
obvious; but changing the traditional card-based transaction payment
ecosystem in mature markets to mobile (whether proximity- or cloudbased) requires a number of components across the retail banks, mobile
operators, handset manufacturers, software (OS) and application
developers, value-added service providers, and trusted service manager
The infancy of the m-payment industry in
In China, the m-payment industry is still at its embryonic stage. Remote
payments are prevalent due to the popularity of online purchases
through smartphones, largely driven by over 75% of internet access in
China being made over a mobile device.
The development of proximity payment is still at the trial stage with
various commercial pilots in major cities headed by mobile operators,
banks and China UnionPay.