Wallets To Become Obsolete In China?

Who needs a wallet anyway? Apparently, not the Chinese. Turns out, three out of five consumers in the country pay with their smartphone when they’re out shopping. That’s right: three in five.

While online payment services have typically been used for purchasing goods through internet shopping sites or to pay for utilities and other bills, some of these services have sprouted up in brick-and-mortar stores to meet consumers while they’re out and about.

Experts say two robust online payment services are the driving forces: Alipay, which is part of the Alibaba Group Holding, and Tencent Holdings’ WeChat Pay. Back in 2014, the two companies battled it out in a smartphone-paid, Uber-like ridesharing market.

Nearly two-thirds of Chinese shoppers have these two payment methods. That’s a vast departure from the U.S., where only 1 percent of shoppers choose options like PayPal to pay online and in stores.

In 2015, mobile payments in China reached 9.3 trillion yuan (about $1.39 trillion), and Alipay took the lion’s share with about 73 percent, followed by WeChat Pay at 17 percent. By the end of this year’s first quarter, WeChat Pay grabbed up to 38 percent of the share, pushing Alipay down to 52 percent of the pot.

Apple Pay has partnered with China UnionPay in an attempt to grasp a share of the payments market in China. Alas, it’s been slow growth, with only 50 million users using this solution, compared to Alipay’s 300 million and WeChat Pay’s 400 million.

The bottom line? Your wallet brand may be made in China, but chances are it’s not being used there.