Mobile payment and e-payment have grown very fast in China in recent years, according to the South China Morning Post, positioning the country "light-years ahead in the online payment revolution."
The growth of mobile payment has changed society from a lot of perspectives, and empowered the digital transformation of the Chinese society. Now we see a lot of services and physical merchandise relying on digital platforms for transactions, and digital payment is fundamental for a digitalized business.
In January, WeChat announced it would support foreign issued credit cards in daily transactions with certified local merchants. What it signifies is that the cashless society is no longer just a feast for the 527 million Chinese mobile payment users, but to anyone with a solid digital footprint.
Ipsos’ recent study on Chinese mobile payment habits shows that 26% of the respondents carry less than 100 RMB ($16 USD), and 14% of the respondents don’t carry cash anymore. Mobile is the new wallet. Always-on consumers appreciate the convenience of ‘going cashless’ by simply tapping their mobile phone to pay for products and services while automatically earning loyalty points.
After paying via WeChat Pay, customers receive a notification from the merchants inviting them to sign up a membership progra reward them with a coupon for their next purchase, or simply ask them to follow merchants’ social media accounts.
The new practices enabled by a mobile wallet help retailers tackle such pain points as unfriendly physical cards, complex procedures to sign up for a membership and the lack of a means to recall customers.
The social and e-commerce functions of digital wallets, such as WeChat Pay and Alipay, are gradually widening the gap with other contactless payment forms, such as Apple Pay, Samsung Pay and contactless cards. The two big players understand that, for retailers, creating a relationship with customers is far more valuable than simply completing the payment process.
Mobile payment is the first step of a series of cashless revolution in the world. With the official opening of Amazon’s unmanned, cashless store Amazon Go, new technologies such as facial recognition, artificial intelligence (AI), and augmented reality (AR) will bring retail to the next level: the future of retail will focus on data and experience. Selling physical products or services could take place in various kinds of scenarios, and retailers’ omnichannel strategy should also evolve to cater to different demands — including cashless service.