The Tendency of China Mobile Payment Market

The Tendency of China Mobile Payment Market

China has one of the most developed mobile payment markets in the world. WeChat payment and Alipay, both have better user experience than Apple Pay, Google Wallet or Android Pay. Yet, China smartphone company has not put their source into building their own payment method. According to the current situation, we are trying to predict the development tendency in near future  of China mobile payment market.

1. Consumer apps with high frequency usage will build their own payment method.
There is a toothbrush theory in E-wallet industry: A product will be able to cultivate your habit, if it is used twice per day. That's why Square accepted Starbucks' strategic investment while itself is in superior position, people drinking coffee twice a day. For those high frequency consumer app, DiDi Taxi, Meituan, Public Remark, they are already able to be opened twice on user end, thus having the potential to become e-wallets or mobile payment methods. Nowadays, payment is way more than a method, but a valuable capability to connect customers, market and finance.

2. Banks will make new payment tools based on their card holders. China Banks fell behind in the era of mobile internet. They have large amount of card holders, but took no action to turn them into mobile payment users. Banks now realize the threat and will invest mobile payment apps, transforming their consumer reserve into available profit models. The China Merchants Bank and Industrial and Commercial Bank of China are showing promising future.

3. Many payment companies will be purchased or invested.
Recently, many investors from China capital circle are looking for online payment companies to invest after they have raised enough funding. They treat online payment companies not only as internet companies, but also a part of infrastructure. Numerous applications will have to rely on it in the future.

4. Chinese version of Apple Pay will be built.
Apple are trying to promote Apple Pay in China, yet have not make substantive progress. Union Pay, the largest credit issuer that supported by most China banks, is not willing to cooperate with foreign payment tools currently. They are looking for potential Chinese companies who are capable of developing their own mobile payment apps. MIUI, Lenovo and Huawei are the list.

5. Whale companies will connect and control customer end and business end.
The traditional e-wallets are mainly based on user end. They maintain and expend business members by promotion events, coupons and subsidies. Apparently it is not a sustainable developing mode. Who can meanwhile provide high quality service to both business and customer ends will be able to lead the competition to the next stage. It's foreseeable that leading players, like Alipay and WeChat, will seize the market with their own POS machine, hardware and software, instead of merely cooperating with agencies in the future.