Close to two-thirds of smartphone users in China now make regular payments on their devices, according to a new report on internet development in the country. The figures from China Internet Network Information Centre showed 64.7 per cent of smartphone users, or about 424.5 million individuals, were making regular mobile payments in June, up 7 per cent from December last year. The study revealed that China’s total number of internet users has hit 710 million, almost double the population of the United States and a 3.1 per cent increase from December. Some 656 million users access the internet via their mobile devices, it said. China’s rapid rise in mobile payments is being driven by the equally fast development of the ecosystem to handle the transactions, the report said. The launch of Apple Pay and Samsung Pay in the country recently gave a boost to the sector’s growth. Popular Chinese smartphone suppliers, such as Huawei Technologies and Xiaomi, are also rolling out new handsets equipped with near-field communication functionality, which allows users to make contactless transactions at certain point-of-sale terminals. “Mobile payments have become a part of life in China now, driven by a combination of factors including e-commerce and mobile commerce, and services such as taxi-hailing apps,” said Michael Yeo, a senior analyst at research firm IDC. Mobile payments have become a part of life in China now, driven by a combination of factors including e-commerce and mobile commerce, and services such as taxi-hailing apps Michael Yeo, senior analyst at research firm IDC Yeo said mobile payments have become so successful, because there is less influence from legacy payment methods such as bank or credit cards, and also because many Chinese internet users’ first experience online is now on a smartphone. The introduction of mobile payments into existing ecosystems by internet companies such as Tencent Holdings and Alibaba Group Holding have also helped make the practise normal for many Chinese, he added. Alibaba owns the South China Morning Post . Tencent has introduced mobile payments into WeChat, its popular mobile messaging app, via a built-in mobile wallet, while Alibaba-backed Alipay is a key component for making payments on Taobao Marketplace and elsewhere in the domestic e-commerce environment, Yeo said. “These have come together to really showcase how mobile payments can work in society, but the ingredients that made this a success are not easily replicated in other markets,” Yeo said. Wang Xiaofeng, a senior analyst at Forrester, said the accelerated growth in mobile payment penetration is the result of many more offline merchants accepting such payment methods. Mobile wallets such as WeChat Wallet and Alipay work by having cashiers scan a Quick Response (QR) code on the users’ devices, making it a simple way of processing transactions. “Scanning QR codes works for small merchants, even street vendors, as long as they have smartphones and a mobile network, with no extra cost for point-of-sale hardware and software,” said Wang. The ease of accepting mobile payments has also been propelled by the rapid growth in use of mobile payments in the retail industry over the last few years, she said. Kitty Fok, the managing director at IDC China, pointed out that Alipay and Tencent often partner with merchants to offer discounts to customers using mobile payment methods. Aloe Liu, a Shenzhen-based office worker in her thirties, said she rarely uses her credit card now, prefering to pay with her smartphone. “Young people born after 1990 are used to buying everything through their smartphones, including shopping online, paying for taxi fares and settling restaurant bills. “We even return money to friends through mobile payments,” she said. “I can go through an entire weekend without using cash [in China].”
