China Cards And Payments Market Size (2024-2030)

The China Cards And Payments Market was valued at USD 9.23 billion in 2023. Over the forecast period of 2024-2030, it is projected to reach USD 13.88 billion by 2030, growing at a CAGR of 6%.

China has undergone a distinctive transformation from a predominantly cash-based economy to one predominantly characterized by digital and mobile phone payments. In contrast to the United States and Europe, where cash and cheques were progressively replaced by debit and credit cards, with mobile payments emerging decades later (and still not surpassing cards in many cases), the majority of Chinese consumers transitioned directly from cash to mobile payments, bypassing cards entirely.

Key Market Insights:

The expansion of card payments has been furthered by governmental efforts to promote cashless transactions. In April 2024, the People's Bank of China, along with the Ministry of Culture and Tourism, the State Administration of Foreign Exchange, and the State Administration of Cultural Heritage, issued a directive to foster the adoption of electronic payments across the nation. As a result, government agencies are mandated to implement sufficient payment acceptance infrastructure, allowing consumers to make digital payments for cultural and tourism-related transactions using debit/credit cards and digital wallets.

China Cards And Payments Market Drivers:

Mobile Payments drives the market growth.

China's rapidly growing mobile payment sector is predominantly led by major players like Alipay and WeChat Pay, which are extensively used by retailers, restaurants, and various e-commerce platforms. Over the forecast period, mobile payment solutions are anticipated to further expand in a country characterized by high rates of internet and smartphone adoption. The proliferation of mobile health (mHealth) applications in recent years underscores the potential benefits of integrating mobile payment services into healthcare. Such integration can help mHealth providers establish more sustainable business models, boost revenues through new participants in the value chain, and reduce expenses related to cash management, fraud, and the settlement of remote payments for diagnostic services and other healthcare needs.

A significant factor contributing to China's readiness for digital payments and the retail transformation is its high level of bank account ownership, which has supported the development of mobile wallets. Leading regional players like Alipay and WeChat Pay have leveraged existing financial infrastructure, including bank accounts, credit cards, and clearing and settlement systems. Additionally, these companies have facilitated easy onboarding for both customers and merchants, allowing users to self-register via the app and enabling merchants to accept mobile payments by sharing their unique QR codes even before completing formal registration.

China Cards And Payments Market Restraints and Challenges:

Rise in credit cards hinders market growth.

The increasing demand for credit cards in China is driving market growth. However, issues such as the rise in credit card theft are expected to constrain the market. The advancement of the digital payment sector has been hindered by the absence of universal standards for cross-border transactions and a lack of awareness in emerging economies. These challenges are obstructing market expansion.

China Cards And Payments Market Opportunities:

China's evolution in payment methods has diverged notably from trends. While many countries have transitioned from cash to credit cards and are now moving towards mobile payments, China has largely bypassed the credit card stage. Credit card usage remains relatively low in China, particularly in the e-commerce sector.

Major Chinese players, Alibaba and Tencent, have significantly influenced digital merchant payments through their platforms, Alipay and WeChat Pay, respectively. These companies have spearheaded the move away from cash in China, viewing digital payments not merely as an end but as a gateway to a comprehensive ecosystem of both offline and online goods and services.

The swift transformation of payment infrastructure in China can be attributed to the widespread ownership of bank accounts and smartphones. Mobile payments have gained immense popularity due to their speed and simplicity, with QR codes being ubiquitous across retail locations in China, facilitating rapid transactions.

The surge in mobile payments has been further fueled by increased smartphone adoption and internet penetration, particularly during and after the pandemic. This shift has significantly boosted online sales for both physical goods and digital services, reshaping business operations across various sectors.

China's regulatory approach to fintech includes several key measures: financial businesses must obtain licenses to operate, companies in insurance and wealth management must implement firewall security to mitigate cross-sector risks, and there must be a separation between non-bank entities and banking information services. Additionally, the central bank mandates that fintech firms establish holding companies and integrate all financial activity subsidiaries.

In December of the previous year, the Bank of China (Hong Kong) proactively promoted the use of the digital yuan (e-CNY) by offering incentives to consumers who registered for its use. The bank distributed red packet rewards valued at 100 e-CNY, redeemable at 14 U Select grocery stores throughout the city, to encourage trials of the digital currency.

China Cards And Payments Market Segmentation:

China Cards And Payments Market Segmentation By Key Payment Instruments:

• Mobile Wallets
• Cards
• Credit Transfers
• Cash
• Direct Debits
• Cheques

In 2023, Mobile Wallets held the largest market share, followed by cards and credit transfers.

China UnionPay (CUP) remains a dominant force in the payments industry. Since its inception in 2002, CUP has been the sole payment card scheme and network in China. Although international schemes are present in the market, they are typically co-badged with CUP. Recently, international payment companies have been granted entry into the Chinese market, with the People's Bank of China permitting foreign scheme providers to establish their own card processing networks. Furthermore, China boasts one of the most advanced mobile wallet markets globally. Mobile wallets have become a prevalent payment method in China, widely utilized for everyday transactions at supermarkets, street vendors, public transportation, and online purchases. The swift adoption of smartphones, increasing internet connectivity, the presence of secure online payment systems, and the rising number of online shoppers have all contributed to the robust growth of E-commerce in China.

China Cards And Payments Market Segmentation By Key Segments:

• Card-Based Payments
• Merchant Acquiring
• Ecommerce Payments
• In-store Payments
• Buy Now Pay Later
• Mobile Payments
• P2P Payments
• Bill Payments
• Alternative Payments

China's payment landscape has evolved uniquely compared to other countries. While many nations have transitioned from cash to credit cards and are now moving towards mobile

payments, China has bypassed the credit card phase. Credit card usage in China remains relatively low, particularly in the E-commerce sector.

Major Chinese players, Alibaba and Tencent, have substantially influenced digital merchant payments with their platforms, AliPay and WeChat Pay, respectively. These companies have played a crucial role in reducing cash transactions within the Chinese economy. For them, digital payments are not merely an end goal but a gateway to a broader ecosystem of both offline and online products and services.

The country's swift transition in payment infrastructure is largely driven by the widespread ownership of bank accounts and smartphones. Mobile payments have gained immense popularity in China due to their speed and simplicity, with QR codes playing a pivotal role. QR codes are ubiquitous in China, available at virtually every store, which has facilitated the widespread adoption of mobile payments.

COVID-19 Pandemic: Impact Analysis

In response to the COVID-19 pandemic, the Payment & Clearing Association of China (PCAC) initiated a campaign on February 28, 2020, urging residents of mainland China to utilize mobile payments, online payments, and QR code payments to mitigate the risk of COVID-19 transmission. This initiative led to a notable increase in mobile and online payment usage during the pandemic and is expected to continue growing in the years ahead.

Latest Trends/ Developments:

June 2022: The Bank of China, in collaboration with Mastercard, officially introduced the BOC Chill Card, its first environmentally friendly credit card. This card is designed to cater to young consumers who prioritize entertainment, leisure, and sustainable consumption, promoting a "Chill" lifestyle. It offers various cash incentives and a flexible Pay Later payment option to accommodate the spending habits and preferences of its target demographic.

April 2022: China's central bank digital currency, the Digital Yuan, was integrated with Tencent's flagship messaging app, WeChat, becoming a payment option within the app's ecosystem. With over 1.2 billion monthly active users, WeChat is widely used throughout China and enjoys popularity beyond its borders.

Key Players:

These are top 10 players in the China Cards And Payments Market :-