Chinese consumers have massively adopted mobile payments without really going through the bank card box, on a backdrop of competition between the two giants of the digital alibaba and Tencent.
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This is a current scene in China: a beggar does the handle in front of a bar terrace in the center of Shanghai. No money, tell him the customers. Never mind, the man in Gray Barbichet tends the QR code he carries around the neck, and customers have no excuse. This beggar 2.0 is not an exception, far from it: in 2021, 62.7% of Chinese over 14 regularly used mobile payment for proximity purchases, according to an estimate of the American Analysis Cabinet emarketer.
Many today have become accustomed to no longer carry their physical portfolio. This revolution, initiated by Alibaba and then WECHAT a decade ago, has boosted these two companies, to alert the banking regulator that tries to organize the sector.
Rare are those who could have predicted such a revolution in a country where the cash was king until the beginning of 2010, the card payment has never been imposed, and even less the credit card. Alibaba, the sector pioneer, gradually developed its Alipay electronic portfolio, lack of practical options offered by traditional banks, to pay on its e-commerce platform, Taobao.
With its success in online payment, Alibaba ventures into physical business by distributing a mobile payment terminal from 2011. Technology is relatively simple: a program within the Alipay application creates a QR Code for Use that the customer presents to a reader in the store. An even less technical version allows the small stalls (or beggars of Shanghai) to display their printed QR code, that the customer scans with his smartphone to transfer.
“Hongbao” digital “war” / H2>
The rocking point takes place in 2014, as a result of the competition of Tencent, the giant video games and the media with Wechat, the social network that equips most of the Chinese smartphones. The company, which also offers online payment means, especially for its video games, has an idea of genius. Every year, during the Spring Festival, the Chinese exchanged billions of yuan of “Hongbao”, these red envelopes containing species. Tencent distributes that year digital Hongbao to its users, who are exchanged after: for many, it is the first experience of using money online.
Alibaba does not want to be left behind: It’s a Hongbao war between the two digital mastodontes, who will offer the most, to push users to link their bank account to Alipay or Wechat Pay. Wechat gains market share, but the market itself explodes through the operation: between 2013 and 2014, the sum of the payments made online double in China. In 2020, Alipay indicated to manage 10 000 billion yuan each month (€ 1,370 billion) of transactions.
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