China Payments Market Size

China Payments Market Analysis

The China Payments Market size is estimated at USD 40.27 trillion in 2024, and is expected to reach USD 60.24 trillion by 2029, growing at a CAGR of 8.39% during the forecast period (2024-2029).

The primary factors driving the market's growth in the region are the cashless society, huge E-commerce market, and high penetration of mobile and online payments, among others.

• China has developed differently in terms of payment methods; while others countries have switched from cash to credit cards and are now switching to mobile phones, China has skipped a step. Credit card usage in China is significantly less, especially for E-commerce.
• Chinese major players Alibaba and Tencent have a significant share in digital merchant payments by introducing AliPay and WeChat Pay and have driven the shift away from cash in the Chinese economy. The companies see digital payments not as a goal but as an entry point to a vast ecosystem of offline and online goods and services.
• The country's rapid shift in payment infrastructure is driven by widespread bank account and smartphone ownership in China. Also, mobile payments have been so successful in China because they are fast and straightforward and are driving the payments market in China. And this speed is possible because of the QR codes. In China, QR Codes are available everywhere, at every shop.
• Boosted by the growth of smartphone adoption and increasing internet penetration, especially in China, mobile payments have taken off since the onset of the pandemic. Naturally, online sales have rocketed for goods or digital services. The paradigm shift to digital ways of making payments has profoundly impacted the way many companies do business.
• China's approach to regulating fintech includes three points: Firstly, financial businesses in the region must be licensed to operate. Secondly, companies like insurance and wealth management must set up firewall security to prevent cross-sector risks. Finally, the link between non-banks and banking information services must be cut. The central bank has also required fintech businesses to set up holding companies and to include all subsidiaries engaged in financial activities.
• In December last year, the Bank of China (Hong Kong), the city's note-issuing bank, took the initiative in encouraging the usage of digital yuan (e-CNY), giving e-laisse incentives to consumers who register to use it. BOCHK is distributing red packet rewards worth 100 e-CNY, which can be utilized to purchase goods at 14 physical stores of grocery chain U Select around the city, to encourage people to test the digital currency.
• During the COVID-19 pandemic in China, the Payment & Clearing Association of China (PCAC) launched an action on 28 February 2020 to encourage people in mainland China to use mobile payment, online payment, and QR payment to avoid the risk of COVID-19 infection. This resulted in a rise in mobile and online payments in the region during the pandemic and is likely to grow further in the coming years.