As retailers in the U.S. do what they can to prepare for the coming mobile payments revolution, other countries are seeing much higher adoption rates that could see them emerge as the flag-bearer of cash-free societies. In some nations, like China, for example, that future is approaching more rapidly than anyone thought possible.
According to eMarketer‘s first-ever projection of proximity mobile payment traffic among Chinese consumers, the number of people who used the technology to complete a transaction will grow 45.8 percent annually to reach 195.3 million users in 2016. In comparison, the U.S. can claim only about 37.5 million of the same transactions this year.
The cause of China’s rapid adoption of mobile payments is multi-factored, but the absence of a strong attachment to credit cards before the advent of digital wallets most certainly played a part. Merchants like Alibaba and JD.com have also thrown their weight behind advancing acceptance of mobile payments, and friends in high places like that can never hurt a new technology’s attempts to establish itself in consumer habits.
Moreover, eMarketer forecasting analyst Shelleen Shum explained that the almost 200 million Chinese consumers paying with their smartphones represent just a small fraction of the country’s overall potential as a driver for the payment method.
“Despite … having a higher penetration rate than the U.S., China’s proximity mobile payments market still remains largely untapped, with usage mostly concentrated [in] larger cities,” Shum said. “Like in the U.S., the challenge is to get retailers to upgrade their systems to accept mobile payment methods at the POS. The phenomenal opportunity for retailers is that smartphone users in China are more willing to store payment information in their phones and are more willing to experiment with other forms of non-cash payments than users in most other countries.”