When Frida Cai left Beijing to study abroad in 2013, China’s financial tech boom was just beginning. She used a debit card for her big expenses and carried cash for everyday spending. By the time she came back, just three years later, everything had changed. “I tried to buy a watermelon from a street seller,” she recalls, “and he told me that he only took mobile payments through the WeChat app.” Ms Cai now says she cannot even remember the last time she got cash out of an ATM, but it was “more than a year ago”.
The mobile payments revolution in China has happened with breathtaking speed and scale. In only five years it has transformed daily life in Chinese cities and also laid the foundations for the country’s mammoth financial tech industry, which last year generated revenues of Rmb654bn ($98bn), according to iResearch. Last year, the value of mobile payments in China overtook the worldwide totals of both Visa and Mastercard.
Almost half the world’s digital payments in 2017 were made in China, through apps such as Alipay (owned by Ant Financial) and WeChat (owned by Tencent), according to PwC research. Alipay and Tencent have now also outstripped PayPal, the US’s biggest online payments operator. They each handled more payments in one month this year than Paypal’s $451bn for the whole of 2017, according to market research firm Analysys.