China lead in mobile payment and services

In this blog post, I will talk about the wide adoption of mobile payment and mobile services in China. I have been working in China for several years and I am still quite amazed by everything that can be done with a cellphone there.

mobile payment in China

China’s mobile payment systems

A fundamental difference with many western countries is that mobile payment is widely used in China and that virtually everything can be paid with a cellphone, from buying something from a street vendor to paying a bill in a restaurant, or transferring money to a friend.

There are two main mobile payment systems in China called WeChat (by Tencent) and Alipay (by Alibaba). To use a mobile payment systems, one needs to download an application  on his cellphone and validate his identity, and generally link the application to a bank account for transferring money to the virtual wallet. This can be done in just a few minutes.  I will describe the main functions of these applications below.

The core function of Wechat is messaging. It allows to  maintain a list of friends and send messages, and make voice/video calls. But Wechat can also be used for mobile payments.  The main payment features are:

  • Transferring money from a bank account to the virtual Wechat wallet to refill it.
  • Sending money to a friend.
  • Sending money or receiving money from someone else by scanning a QR code on his cellphone or let him scan your QR code.
  • Pay a bill at a store. This requires to scan the QR code of the store with the cellphone and then enter the amount of money and password. Then, the store owner receives the money. Another way is to let the store owner scan your QR code to withdraw money from your account.
  • Pay for a wide variety of services such as:
    • Pay utility bills such as water, electricity
    • Pay the bills of your cellphone
    • Order food to be delivered to your door.
    • Order food at the restaurant by viewing the menu on the cellphone, and selecting items.
    • Order a taxi or ride
    • Rent a public bike by scanning the QR code of the bike,
    • Order cinema tickets,
    • Reserve airplane/train tickets/ hotel room
    • Use your cellphone as a ticket in the bus/subway if the cellphone has NFC technology
    • Buy products from online retail stores
    • Send money to charity
    • and many others

The other main payment system is Alipay.  Unlike Wechat,  Alipay is not a messaging application. It is designed for mobile payment and is actually more popular than Wechat. It offers mostly the same functions. Besides, some other functions that I did not mention above are:

  • Pay a credit card
  • Split the bill between friends at a restaurant
  • Buy game
  • Buy lottery

The Wechat and Alipay mobile payment systems are widely used, everyday by hundreds of millions of people. I know many people in China that basically use this to pay for everything in their daily life, and don’t use cash anymore. Actually, mobile payment is often the preferred way of payments in several stores.  For example, I recently bought some milk tea at a store and the employee asked me to pay with Alipay instead of money because he did not have change.

This is quite different from many western countries where mobile payment is rarely used. For example, Business Insider ( ) revealed in May 2018 that the mobile payment market in China is valued at 16 trillions, while in the US, it is only 112 billions. In other words, the mobile payment market is more than 140 times larger in China than in the US.

What is the reason for the wide adoption of mobile payment in China? 

There are several reasons:

  • Cellphone plans are very cheap. Thus, many people has a cellphone with a data plan.
  • Using these payment systems is very simple.  To pay, one scans a QR code or let someone scan his QR code. Then, he enter his password to authorize the payment. It can be done for any kind of transactions, between individuals or at a store.  Anyone can receive or send money.
  • There is no fee to pay using these payment systems. For example, the only fee that Wechat charges is 0.1 % when transferring money back from a virtual wallet to a bank account (if the amount exceed 1000 RMB, which is about 150 $ USD). These fees are almost nothing compared to processing fees of credit cards or  debit card in many western countries.
  • Creating a mobile payment account is simple and basically just require to link the account to a bank account. This is much easier than getting a credit card, since mobile payment systems are not used to borrow money

Impact on innovation and adoption of mobile services

The fact that mobile payments are widely used in China has started to transform many aspects of daily life. For example, at the restaurant, it is possible to scan a QR code on a table to see the menu and then order food, which will then be delivered to the table. Another example is to scan the QR code of a bike on the street to unlock the bike, pay to use it, and then leave it anywhere after using it.  A third example, is to go to restaurant with friend, and then split the bill or quickly transfer money between phones, or use the phone to pay in the bus or subway. A fourth example, is to pay at a vending machine using by scanning a QR code.

The wide usage of mobile payment creates huge opportunities for the development of innovative mobile services in China, that cannot be offered on a large scale in other countries.  Thus, I believe that is a key advantage that helps drive innovation in China for mobile services.


In this blog post, I discussed the adoption of mobile payment and mobile services in China. Hope that it has been interesting! If you have any comments, please write it in the comment section below.

Philippe Fournier-Viger is a professor of Computer Science and also the founder of the open-source data mining software SPMF, offering more than 150 data mining algorithms.

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