Money is quickly becoming obsolete in China. Mobile payments have become much more convenient. They have surged to $5 billion on the continent.
The electronic payment method has revolutionized trade in China. Hundreds and thousands of small shops that include restaurants, grocery stores, and teahouses, as well as markets in the water market, are now accepting them.
In the big Chinese cities, paying paper money is virtually dead, thanks to the convenience of mobile payment, which has risen to $5 billion on the continent.
Ask Lin Nianbao, owner of Ruyi Restaurant, who sells noodles, meatballs, and rice on the road from Lancun to Shanghai. Lin is now a strong supporter of the country’s rapid digitization, where electronic payments and online food delivery services have helped grow and prosper his business.
“You do not need more money to run the restaurant. It’s a changing business world because mobile phones are starting to dominate people’s lives. It’s a typical disruptive technology. It forces us to learn how we can best leverage applications to grow our business. We thought it was worth trying when the payment service providers approached us. The rapid increase in mobile payments in small restaurants like ours is a surprise.
Applications have collected a lot of data through payments and they know exactly who our customers are and what they want. I am ready to work closely with them in the future if they offer other paid services to promote the store.” Lin said.
By 2015, Ruyi has been charging cash to all its customers, but electronic payments through WeChat Pay and Alipay now account for more than 70% of their total transactions, about 10,000 Yuan ($ 1,515) per day.
Small restaurants like Ruyi operate in a fierce fast-food sector, where each dish costs between 10 and 20 Yuan, and operators are hit by a number of other restrictions such as high rents. The restaurant is big enough for about 20 tables, which can accommodate about 50 people at any time. It was one of the first street food companies to introduce electronic payments early last year.
Ruyi is one of the many companies in mainland China to benefit from the digitization campaign.
The Alibaba Group, owner of the South China Morning Post, and Tencent Holdings, which offers Tenpay service through its instant messaging application WeChat, have found their way into hundreds and thousands of small shops. Skala, including restaurants, grocery stores, and tea rooms, as well as wet markets credit cards have previously rejected bank cards for payment.
According to Analystsys International, China’s payments market rise to 35.9 billion Yuan or half of China’s gross domestic product in 2016 in June this year. Alipay controls a 39% market share and Tenpay, 27%.
Worldwide, China holds 42% of e-commerce transactions globally and handles 11 times more mobile payments than the US, according to McKinsey Consulting.