The rapid development of China’s mobile payment system.

In a world where technology advances daily, and companies and people must adapt accordingly, mobile payments have been an area that has undergone a global revolution, but nowhere is this transformation more evident than in China.

While America spent the past decade upgrading its bank-based magnetic striped cards with chips, China experienced a retail payment revolution. Leapfrogging the card-based system, two new payment systems have come to dominate person-to-person, retail, and many business transactions.

The dominant player in China’s mobile payment system

Alipay and WeChat Pay have emerged as the clear favorites for mobile payments in China over the past year UnionPay, associated with a significant state-owned card payment network, secures the third position.

• Alipay

Alipay, launched by Alibaba Group in 2004, is a prominent online payment platform with 1.3 billion users worldwide as of 2022. It integrates online and offline services, offering features like instant credit, installment payments, and cash back. Some websites like Taobao, Amazon, and AirAsia use Alipay as an e-commerce payment system. Alipay has gained popularity for its facial recognition payment option, particularly among consumers who prefer offline transactions. This innovation enables consumers to shop without the need for a mobile phone, offering added convenience.

• WeChat

WeChat Pay is a popular digital wallet in China introduced by Tencent’s WeChat in 2011. WeChat’s success is attributed to its versatile interface, integrating social media and mobile payment services, along with compatibility with various in-app applications. WeChat Pay extends its services in China to include a range of financial products, from investment funds to insurance, enabling users to make payments directly within the app.

• UnionPay

China UnionPay (UnionPay) ranks among China’s top three payment methods. As the exclusive domestic bank card issuer in China, UnionPay links ATMs of major and smaller banks across mainland China, functioning as an Electronic Funds Transfer at Point of Sale (EFTPOS). Unlike Alipay and WeChat Pay, UnionPay is not a digital wallet; it is the sole issuer authorized to make card payments in China.

Can foreigners in China use the mobile payment system?

Foreign residents in China and tourists alike can easily open WeChat and Alipay Pay accounts. WeChat and Alipay now allow users to link their WeChat and Alipay accounts with their international bank cards, something that until very recently was impossible, rendering short-term business and tourism visits to China highly challenging and making foreigners solely reliant on cash as a means of performing payments. These measures signal a promising return to the embrace of tourism and visitors of all kinds to China.

China’s mobile payment revolution represents a major shift in how transactions are conducted. It is much further ahead of Western countries in the size of its user base and breadth and depth of functionalities, offering unparalleled convenience, financial inclusion of different strata of Chinese society, and reshaping consumer behavior.