Is China Going Cashless?

July 5, 2017         By: Steven Anderson

It may be one of the great ironies of our age that the country that invented paper money (China) is potentially about to throw it over completely thanks to the rapid growth of mobile payments. What’s more, this isn’t an effort staged by government fiat—though the government doesn’t seem opposed—but rather a push staged by the Chinese people themselves.

The Chinese people spent a combined total of $5.5 trillion through mobile payment platforms in just 2016, an amount which represents 50 times the amount spent by Americans. While the Chinese represent about four times more people than the United States can muster, that’s still a huge disparity even accounting for the differences in population.

Furthermore, it seems that the Chinese are eschewing the credit card, and going directly from cash to mobile payments. Evidence of this can be seen all over, particularly in Hangzhou, home of Alibaba, the biggest online shopping platform in the world. Its mobile pay app, coupled with WeChat Pay, makes up about 90 percent of the total market. That’s making it tough for other competitors to even breach the market, even for titans like Apple Pay.


Reports suggest that Hangzhou is almost tailor-made for mobile payments, with buses and subways all geared toward the Alipay platform. A Buddhist temple took Alipay donations, and even a street musician accepted QR code payments.

The causes of this range from concern over counterfeit money to being robbed, points which really aren’t a problem with mobile payments systems. While there’s a certain resistance to debt of any kind in China—making it tough for credit cards to find a foothold—mobile payments systems that could be linked to a bank account or debit card were just a kind of electronic money.

When cultural and technological factors combine, it’s easy to see why there was such a push to mobile payments in China. The resistance to debt coupled with the attractiveness of being able to use money without having to physically carry it must have made sense to large amounts of Chinese, showing why there was such a push toward this platform.

Closely-ingrained philosophies like this make for fertile ground for mobile payments and other technologies, and that means China will likely be a big market for this field for the foreseeable future.