The New York Times wrote over the weekend on an economic revolution happening in China. The country is doing away with paper money and coins, and is doing so at a rapid pace:
Almost everyone in major Chinese cities is using a smartphone to pay for just about everything. At restaurants, a waiter will ask if you want to use WeChat or Alipay — the two smartphone payment options — before bringing up cash as a third, remote possibility.
Just as startling is how quickly the transition has happened. Only three years ago there would be no question at all, because everyone was still using cash.
“From a tech standpoint, this is probably one of the single most important innovations that has happened first in China, and at the moment it’s only in China,” said Richard Lim, managing director of venture capital firm GSR Ventures.
But it is not just China. A study released this month, conducted by the Fletcher School at Tufts and Mastercard found that large developed economies in the West are being left in the dust as other developing economies follow in China’s footsteps. Researchers created a Digital Economy Index to measure how different countries stack up in their transition to a digital economy.
While several smaller developed economies are in the forefront in terms of current ranking, including Singapore and New Zealand, the developing world is leading the charge in terms of momentum.
This has far-reaching implications for a rebalance of economic power. Emerging markets stand to gain the most from the potential to tap huge sources of entrepreneurialism, until now separated from the global marketplace. Sellers once confined to traditional markets will soon have access to e-commerce platforms reaching consumers across the globe.
With countries such as India and Turkey seeing skyrocketing internet usage rates and rapidly advancing adoption of digital payment systems, the landscape of global commerce is set to see a complete transformation.