Mobile Payments vs Card Payments: What Do the Chinese Prefer?

By Pippa Horn

In China, mobile payments have made large inroads thanks to rapid smartphone adoption, and the absence of alternative payment methods. Digital payments have dethroned cash and cards in a revolution that is being led by two key players, WeChat Pay and Alipay.

With over 60.53 billion mobile transactions last year alone in China (1), mobile payment apps have leapfrogged credit and debit cards, signposting the way forward for the rest of the world. This year, there is an expected 525.1 million people in the country who will use mobile payments, making up 45.2% of the population.

Given China’s nationwide adoption of QR enabled payments, Western card providers such as Visa and Mastercard have continuously struggled to gain a foothold in China. This extends to card providers born out of China such as UnionPay, who were forced to introduce their QR enabled payments alternative eUnionPay, to compete with the big players. Put simply, the use of credit cards in China is sporadic, if not non-existent. Consumers have been skipping the adoption of payment cards in favour of mobile options like WeChat Pay, which is built into the near-ubiquitous mobile messaging service WeChat, and Alipay, offered by the popular e-commerce platform Alibaba.

China’s mobile payments boom has been powered by the fast adoption of online retail, financial and on-demand services, such as ride-sharing activities, in the world’s largest internet and smartphone market. Popular mobile payment apps, such as WeChat Pay and Alipay, have enabled consumers, including those in rural areas, to go straight from cash to smartphone, leapfrogging the use of credit cards in a nation that demands more than merely a mechanism to transfer cash.

Mobile payments are used for a wide range of transactions, from paying for smartphone game upgrades and ordering takeaway food online to paying tuition fees and sending electronic hongbao – red packets with cash as gifts. But with under 3% market share, why is it the case that US born digital payment method Apple Pay lags so far behind in China’s quest to become a fully cashless economy?

In fact, foreign businesses who are looking to tap into the Chinese market would be forgiven for wondering why WeChat Pay is so successful in China. After all, it’s just another payment app, right?


WeChat Pay is just a mere function of the WeChat app – China’s largest and most dominant social network. It manages to successfully combine all of the most pertinent Western apps including the likes of Yelp, Facebook, Uber, PayPal and WhatsApp, into one smooth-running ‘super-app.’

The benefits that catapult WeChat Pay ahead of competitor platforms such as Apple Pay are largely due to the fact that it is part of the WeChat eco-system – an end to end user system that is home to over 1.4 billion monthly users. It is often referred to as an all in one app that forms the basis of daily life in China.

Think of all the things you can do with your smartphone today, whether it’s booking a train ticket, finding a hotel, paying bills, messaging a friend, sharing photos, ordering food, and so much more – almost all of these things happen in separate applications. In China, all of this can be done in a single app. Compare the above to all of Apple Pay’s capabilities and it becomes clear why the usage figures are so transparent.

The vast majority of companies such as Apple Pay consider mobile payments as merely a money transfer tool, ignoring the fact that in China, their smartphone penetration rate means that most people are able to do most things on their mobile devices, including management of their personal finances. Having one system to aggregate all of this as opposed to separate apps for separate functions forms the basis of why Apple Pay and many others have struggled to find their feed in China.

1. China Daily: Mobile payments continue meteoric rise

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