WeChat Wallet and Alipay are the two main electronic wallets in China. WeChat Pay has wider coverage and can be used in China, Taiwan, Hong Kong and South Africa; Alipay can be used in China, Taiwan and Hong Kong only.
According to a report published in 2016 from Worldpay, in China, 50% of transactions were processed via a digital wallet, debit card and credit card totalling an 11% market share each. Its estimated that in 2020, the market share of a debit card will increase to 13% and credit card will increase to 14%.
In addition, Worldpay’s report also predicts that in 2020, the overall size of the Chinese e-commerce market will reach 1,442 billion US dollars, double the US market (779 billion US dollars) and 9 times of the Japanese market (153 million US dollars). The rapid of development of e-commerce like Alibaba, Taobao, JD.com and WeChat e-shop etc also increase the market share of digital wallet dramatically.
You might wonder, how e-commerce influences the use of a digital wallet so much and not the usage of credit card. Besides government support, there are a few factors related to customers.
How to avoid abuse and to protect your digital wallets?
In China, mobile phone numbers and bank accounts use the real-name system. For authorisation purposes, users need to link their mobile phone number and bank account details to the digital wallets so that itis strong enough to avoid commercial fraud. All transactions are then recorded in the backend system of the E-wallet, providing additional transparency.
We can foresee that the usage of digital wallets will increase rapidly in China. Compared to using cash, a digital wallet is very handy – no coins, no fake money and no exchange. Also, the supporting facilities are doing very well to adapt and encourage people to use the digital wallet. Next time, when you have a chance to go to China, you will be amazed that you can do any type of purchases with your mobile phone only.