UN Report: Alipay and WeChat Pay Enable Phenomenal Digital Payments Growth in China

Payments
UN Report: Alipay and WeChat Pay Enable Phenomenal Digital Payments Growth in China

A recent study by the UN-based Better Than Cash Alliance supports what payment facilitators have long known – that enabling access to electronic payments is increasing financial inclusion and creating opportunity.

The report, titled “Social Networks, e-Commerce Platforms and the Growth of Digital Payment Ecosystems in China — What It Means for Other Countries,” looks at the economic impact in China of leading payment facilitator Alipay and WeChat Pay. It says the two companies enabled $2.9 trillion in digital payments during 2016, an increase of more than 20 times over the past four years.

That eye-popping number is just the beginning – the impact of the access to digital financial services is the real story.

Among the report’s key findings is that companies like Alipay are making it easier for small and micro merchants to access the capital they need to grow their businesses. More than 4 million small businesses had accessed a total of $107.3 billion USD through the Alipay platform as of last September, the organization said.

The report looks at the factors behind the success of digital financial inclusion in China, in hopes of helping other countries replicate it.

Among the lessons it mentions for payments providers is the value of making tools such as APIs widely available so developers can integrate the payments platforms with software that addresses user needs more specifically. The report also credits QR codes for expanding payments to underserved populations in a significant way.

According to the report, the conditions that made transformation possible in China – primarily the proliferation of smartphones and an existing social media network – are present in a number of other economies as well.

South Africa, for example, sees three-fourths of its internet traffic taking place over mobile channels. Yet only 15% of the South Africans reported making a purchase using a mobile phone within the previous month, the report said.

“Widening access to financial services has always been at the heart of Ant Financial’s mission and we are proud to have empowered more people to save, invest and gain access to capital,” Eric Jing, CEO of Ant Financial Services Group, which operates Alipay, said in a press release about the study. “There is a quiet revolution underway and we know, firsthand, that our services are making a real difference to hundreds of millions of consumers.”

“But, as this groundbreaking UN report highlights, this revolution is only just beginning. We see tremendous potential to bring many more people into the financial system, in China and markets around the world,” he continued.

The Better Than Cash Alliance is a partnership of governments, companies, and international organizations that advocates for financial inclusion through a transition from cash to digital payments.

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Double Diamond Payments Research Latest Reports On Major Trends In Payments Industry

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Double Diamond Payments Research Latest Reports On Major Trends In Payments Industry

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