China may be first nation to go cash-free
Gross value of third-party mobile payment rose more than 200% in 2016
BEIJING Ms Yang Qianqian holds out her smartphone to scan a barcode at a fresh fruits and vegetables stall at an outdoor market in Beijing, China.
The dance student is part of an explosion in the use of mobile payment platforms in China as consumers increasingly take out phones instead of cash to make payments.
"Though I have cash on me, it is not convenient to get it when I am carrying a lot of bags," said Ms Yang, 25, clutching plastic bags filled with groceries.
China was the first country to use paper money, but the popularity of mobile payment has some analysts forecasting it could be the first to stop.
The gross merchandise value of third party mobile payment rose more than 200 per cent to 38 trillion yuan (S$7.65 trillion) in 2016 from a year earlier, said China-based iResearch.
The growth of the cash-free system has been supported by China's rapidly expanding e-commerce market.
"I think it is really very possible that China becomes the first or one of the first cashless societies in the next decade," said Mr Ben Cavender, a director at China Market Research Group.
He estimated China's mobile payment market is 40 to 50 times larger than the US market.
Alipay, started by e-commerce giant Alibaba and now owned by its affiliate Ant Financial, and WeChat Pay, which is built into Tencent's popular messaging service, have hundreds of millions of users between them and are China's dominant payment platforms.
In Beijing, it is hard to find a product or a service that cannot be purchased with a mobile. Some restaurants no longer accept bank notes.
At the fresh produce market, stallholders display barcodes for customers to scan - though many shoppers appeared more comfortable with cash.
"People at my age do not dare to use it," said a woman in her 50s.
Mobile accounted for 8 per cent of the total value of retail payments in 2015 and is expected to reach 12 per cent in 2020, according to a report published in April by UN-backed Better Than Cash Alliance. - AFP