by JOHAN NYLANDER
A customer uses the mobile payment at a noodle stand in Shenzhen PHOTO/Johan Nylander
Standing in line at a Starbucks in downtown Shenzhen, I suddenly realize that no one in front of me is paying with cash. They aren’t paying by credit card either. In fact, I can’t see a single customer holding a wallet or a purse. Instead, they just hold their mobile phones over a reader and – beep! – the latte is theirs.
“Almost no one uses cash here anymore,” says cafe manager Lily Li, adding that more than 80% of all payments in the coffee shop are made via mobile phones.
But it’s not just global chains that offer “m-payment” in one of China’s most technologically advanced cities. Out on the street, two women are selling noodles from a small stall during the morning rush. Amid the steam billowing from the big boiler and the smell of hot spices, I can hear the constant beeping of phones scanning the stall’s QR code.
While digital payments are dominated by debit or credit cards in many Western countries, China’s consumers have jumped directly from cash to mobile.
Of the country’s 710 million internet users – more than the United States and Europe combined – the utilization ratio of mobile online payments stands at 57.7%. Put in plain English, the majority of people who go online are using their smartphones to pay for goods and services, primarily through Alibaba’s Alipay or WeChat’s payment service, according to a November report by consulting firm Ernst & Young and Singaporean bank DBS.
“I can hardly remember the last time I used my wallet,” said Mofei Chen, founder and CEO of Money Bazaar, a peer-to-peer currency exchange platform.
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