Over 30% of mainland internet users believe China will be a completely cashless society within the next 10 years, according to a report released by the market research firm YouGov earlier this month.
There is little doubt that China is currently leading the world in the mobile payment market. In today’s urban areas, the majority of Chinese consumers own smartphones, allowing them to use mobile apps to pay for just about everything.
The survey shows that the adoption rate of mobile payment solutions has caught up quickly, standing at 73% this year. This change happened at a startling rate, since major payment service providers like Alipay, WeChat Pay and Union Pay entered the field just a few years ago.
In China, the explosive development of the mobile payment sector goes hand in hand with the rapid rise of the country’s e-commerce industry. Chinese consumers embrace online shopping activities because of the speed and convenience. China has therefore provided fertile ground for industry leaders such as Alibaba and Tencent to educate consumers about the advantages that mobile payment apps offer.
It is not hard to foresee a cashless society in China as the e-commerce sector continues to evolve in a highly competitive commercial environment spurred by a number of leading players
As a result, even though 86% of online users indicated in the YouGov study that they still view cash as the top payment option when purchasing offline, it is not hard to foresee a cashless society in China as the e-commerce sector continues to evolve in a highly competitive commercial environment spurred by a number of leading players.
The same study also finds that Alipay is the dominant mobile payment app used by Chinese consumers, with an adoption rate of 83%. It is then followed by Tencent’s WeChat Pay (25%) and UnionPay (20%).
However, the development of mobile payment faces some challenges as well. Chinese consumers are not fully ready to become cashless partly due to security concerns, the YouGov report points out. Sixty-two percent of respondents said using mobile and cashless payments might raise the possibility of falling prey to fraud and theft.
In a recent experiment, Alibaba tested a cashless supermarket in Beijing, giving customers no other option but to pay for their fruit and vegetables with Alipay. The consumer response to the trial varied. According to a report by domestic media organization EEO.com, consumers questioned the legality of a store declining cash payment.
“Merchants who declined to accept Chinese currency RMB violated the law,” one central bank official reportedly said, “and banks and payment institutions are similarly in breach of the same law if they guided merchants to do so.”
YouGov concluded the report with some suggestions on how to promote the concept of “cashless” to those cash-dependent Chinese. For example, it advises payment firms and banks to work with brands deemed trustworthy by consumers to encourage them to adopt cashless payments.
This article was originally published on Jing Daily.