PBOC: Chinese Mobile Payment Market Reflects Major Growth
We’ve all known, anecdotally, that mobile payments are popular in China. The growth of Alipay and WeChat Pay has been too substantial for that not to be the case. The fact that the People’s Bank of China (PBOC) has even tried to put the brakes on mobile payments somewhat with the move to open up a universal clearinghouse of sorts for data underscores this point. Recently, PBOC released new information that only showed the Chinese love for mobile payments further.
In the second quarter of 2017, the PBOC report notes, Chinese banks saw a combined total of 8.6 billion mobile payments take place. That’s up just over 40 percent from the same time a year prior, reports note, and that was just the start.
The total value of all those payments was likewise up, 33.8 percent up from the same time last year to reach 39.24 trillion yuan, or right around $6.012 billion US as of this writing. It wasn’t just banks that saw the gains either; transactions from non-bank platforms were up 34.9 percent, reaching a total of 31.49 trillion yuan, about $4.825 billion US as of this writing.
A recent report from Ipsos, Tencent and the Chongyang Institute for Financial Studies noted that 84 percent of respondents were comfortable leaving the house with nothing but their mobile devices and no cash at all. Effectively, China is becoming a cashless society, not by government fiat but by popular demand.
That’s a development that’s likely weighing heavily on the PBOC. Since its primary stock in trade is cash, the notion that it could be effectively replaced by a slate of mobile payments programs is likely a disaster in the making for the organization, which is potentially why we saw it make moves to limit mobile payments’ market power recently. It largely has little choice but to step in or risk getting rendered obsolete in the face of a country that’s not particularly interested in paper money any more.
Still, there’s probably only so far it can go with this one, and limiting the people’s access to a tool they’re increasingly and happily embracing represents a serious potential for negative repercussion later.