Cash in China on its way out as mobile payments continue to rise

No market has adopted mobile payments quite as quickly and comprehensively as China - from market stalls to malls, the smartphone has become the primary wallet for millions of Chinese consumers.

According to eMarketer’s latest proximity mobile payment forecast, more than three-quarters (76.3%) of smartphone users in China will use a phone to pay for goods and services at the point of sale (POS) in 2017. Subsequently, China is moving toward a cashless society as the benefits of using mobile phones to pay offline become ubiquitous in cities and continues to spread to rural areas as well.

eMarketer has raised its projections by more than 86.0% for 2017, and now expects 461.4 million people - or about a third of the entire population - in the country to use a phone to pay at the POS.

By 2021, almost 80% of smartphone users will be tapping, scanning and swiping at the POS. By comparison, the US will have 23.0% of smartphone users doing so, and in Germany it will only be 15.0%. making China the clear market leader.

"Mobile payments at the POS appeals to the Chinese consumer, as it is perceived to be faster, more convenient and safer than cash," said Shelleen Shum, senior forecasting analyst at eMarketer.

"With incentives for both users and merchants by incumbents WeChat Pay and Alipay, adoption has spread rapidly. Even those living in the rural areas are starting to adopt this method of payment, and the speed with which China has transitioned away from cash is truly remarkable and has lessons for other countries moving toward a cashless society."