Chinese Third-Party Mobile Payments Market Explodes

In 2016, reports note, the value of the third-party mobile payments market in China was about $5.5 trillion, a number that represents not only a three-fold jump from the previous year, but also a number that’s a little less than a third of the entire economy of the United States itself. What’s more, that already-explosive number may not slow down any time soon.

Word from Nielsen suggests that 86 percent of Chinese consumers paid for online purchases using a mobile app of some sort, which is a much greater number than most any other country. Indeed, Chinese mobile payment use beats United States mobile use by a factor of almost 50, based on 2016 numbers from both countries.

Moreover, around 60 percent of those who use mobile payments are routinely doing so, using mobile payments on about a weekly basis. That means lots of repeat users, a sign of an excellent market.

Just to top it off, there doesn’t seem to be a rural / urban divide here, as mobile payments are reportedly hitting both markets with at least some sense of balance. While rural connectivity generally lags urban, there are some adjustments that can be made on that front; recently, quick response (QR) codes have proven to be a big help here, as well as delayed payment processing.

There’s always a limit to growth; no market can grow forever and usually explosive growth one year means slim growth or even contraction not too far after. So while that contraction or slowdown may not happen this year, it’s a safe bet it will at some point. Still though, the gains already seen have been impressive by any standard, though it looks like the market might have front-loaded a lot of demand to make it look bigger than it actually was. A release that came out in stages would have seen lower numbers, but had greater overall longevity as new entrants came on board gradually.

Still, right now, mobile payments are a big market in China, and this might be the next big stop for the cashless society concept. Too many people are using mobile payments systems for them to not take off.

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