Learning from China

Our recent visit to Shanghai sprung a lot of surprises and one that stood out the most was the adoption of Cashless payments. The sheer number of places that preferred to accept Alipay or WeChat Pay in lieu of cash was staggering. Having permeated into multiple aspects of life, right from hailing a taxi to shopping at a Brick and Mortar shop, paying for rents, utilities, stores, bike sharing, hotel booking, food ordering etc; all accept either Alipay or wePay. All you need is a mobile phone with a linked bank account and you can pay in almost any store in the country!

Now mobile payments are not a revolutionary technology by any stretch of the imagination. It’s the massive adoption that makes it such a stellar achievement. What started as an out of the box solution to pay employee bonuses for the new year, soon gathered momentum and became a household name for consumer payments.

wePay and Alipay are front runners in the Chinese mobile payments industry with a host of other players competing for market share. Here’s a brief look at a few key industry leaders who are revolutionizing the Chinese mobile cashless payments market.

Mobile payments are not a revolutionary technology by any stretch of the imagination. It’s the massive adoption that makes it such a stellar achievement.


Leading the way is Alipay. As on Q4 2016, Alipay has the largest market share amongst all the major Payment Service Providers at 43.2% while eclipsing the mobile payments sector at 56% compared to their nearest competitor, WeChat Pay. You can buy gold, funds and other financial instruments on Alipay. But what truly separates Alipay from the rest is their foray into markets beyond China. Alipay is now accepted at select merchants in South Korea, Finland, Singapore, Switzerland, Thailand, Israel and more.

WeChat Pay

The second most popular mobile payments service and the closest competitor to Alipay. What started off as a social messaging platform by Tencent Technologies, eventually grew into a payments company. Imagine them as a chat messaging service similar to Whatsapp but with integrated payments. Over the years, WeChat Pay evolved from a P2P payment method into a national payments service provider. Even though WeChat Pay has a lower market share compared to Alipay, there is a huge scope for adoption since about 50% of WeChat user base are yet to use WeChat Pay.

Lian Lian, PayEase, Yeepay

With a combined market share of 5%, Lian Lian, PayEase and Yeepay have some interesting product offerings with the likes of investment options and one-click payments. They have an existing partnership with China UnionPay for Banking services. However, what’s capturing everyone’s attention is their partnership with Apple Pay, who have had a rough few years trying to gain foothold in the Chinese market. This partnership with Lian Lian, PayEase and Yeepay sees Apple Pay foray into the Digital Payments sector. It’s easy to see why Apple wants a slice of the digital payments pie in China. Now that it has a strong foot hold, they can now look forward to leveraging their brand.


Mobile payment methods amounted for $5 trillion in 2016, according to Analysis data cited by Hillhouse Capital. With almost every business accepting mobile payments, there is a general fear of missing out on the digital payments ride. The average consumer in China expect every store to have a mobile payment option and hence would be unwise for Businesses to not adopt these technologies. The technology is being made affordable and is so wide-spread, that there is a significantly high adoption rate even in the poorer section of society. This in itself is an interesting case study of how countries aiming to go cashless can plan for financial inclusion, one of the elements (discussed in our earlier article) hindering societies to go cashless.

According to CLSA, a research investment company based in Hong Kong, electronic payments would amount to in $45 trillion by 2021. Such a massive surge in alternative payment methods has called for the People’s Bank of China (PBC), the country’s central bank, to issue a new rule requiring that all payments made through third-party platforms like Alipay and WeChat Pay would need to pass through a new, independent clearing house starting in June 2018.

China’s adoption of mobile payments serves as a great template for other societies aiming to go cashless.