The brave new world is a cashless one.
According to the Wall Street Journal, mobile payments have swelled to an astounding $9 trillion a year in China, publicizing the purchasing and borrowing behaviors of EACH Chinese residents, including the panhandlers. Among the many capabilities of QR code ( quick-response code) via a smartphone, the Chinese population can utilize seamless and cashless transactions when purchasing vegetables from their local grocer. The gentry suspended their reliance on physical banknotes or coins in favor of operations employing digital information.
“Recommend using WeChat Pay,” was printed on the sign belonging to homeless man, just outside of grocery store, suggesting that handouts had now gone digital, and charitable giving is encouraged via mobile-phone services, such as we chat. The placard and the solicitor readily illustrate the shift: payment over digital spaces, by everyone.
Alibaba Group Holding Ltd. and Tencent Holdings Ltd. have emboldened the trend in China, driving financial innovation that has matured in the realm of media, travel, automobiles, and retail but also has to invest, fulfill personal debts, and cover services.
Alibaba, which hosts online shopping bazaars, where consumer goods are sold, and old-fashioned cash has no place, assembled more than a decade ago after observing the success of PayPal Holdings Inc. Alipay began as an escrow service, holding payment until buyers received their goods, but in 2013, it evolved into the largest mobile-platform, bypassing Paypal. That very same year, the WeChat instant-messaging app linked to a mobile-payment system. Tencent enabled WeChat users to send virtual red envelopes of ‘cash’ to friends during the 2014 Lunar New Year, where 16 million red packets were sent, which cemented WeChat Pay as a viable player within the world of digital payment. Today, approximately 40 percent of China’s mobile-payment market use WeChat, linking their bank account to the app, while 54 percent use Alipay.
Read the second part of “China Has Gone Cashless, Is The U.S. Next?“