Mobile Payments: Comparison of Two Powerhouses of the World

China and the USA are the largest economies of the world, and one of the most important criteria for being a large economy is having an evolved financial infrastructure. A well-advanced financial infrastructure has helped in the financial inclusion of both countries which have in-turn helped in the growth of the economies. The financial infrastructure of both the countries have been heavily dependent on the advanced technologies to provide convenience to the user so far, but in the next stage, the increase of financial activity features on mobiles would determine the next wave of convenience for the users. In the chart below, we have compared the mobile transaction value to the total cashless transaction value in the respective countries.

Source: BIS, People’s Bank of China, and Forrester Research.

It can be noted that China has mobile payments accounted for approximately 6.1% of cashless transactions in 2018 and this is majorly due to the faster adoption rate of mobile payments by consumers in online retail, financial, and on-demand services, such as ride-sharing activities, movie ticket bookings, and retail payments. According to the China Internet Network Information Center (CNNIC), around 583 million people made mobile payments in China in 2018 compared to 526.6 million people in 2017 – an increase of 10.7% from 2017 to 2018. Alipay and WeChat Pay are the two players that are prominent in the mobile payment market in China. Collectively, both companies hold 92% of the market share in China.

On the other hand, mobile payment transactions in the USA has grown steadily with a CAGR of 32.71% from 2014 to 2018. Consumers in the US are more inclined towards making payments through credit cards and debit cards compared to mobile payments. On average, a person in the USA holds 3.1 credit cards, and 67% of the total population in the USA have credit cards. The other major concern for mobile payments is that consumers do not feel secure in linking their bank accounts with payment applications. A study by YouGov states that 56% of US consumers feel that mobile payments increase the chances of fraud and theft. Only 5% of people trust mobile payment as a secure method.

Introduction of payment applications from major companies such as Apple, Google, and Amazon have fueled the growth of mobile payments in the USA in recent times. Alipay has entered the US market by partnering with Atlanta-based payments processor First Data, under which more than 4 million US merchants will accept payment via Alipay. However, Alipay is more interested in the growing number of Chinese tourists and students in the USA to gain mobile payment market share.

According to a study by Nielsen, over 90% Chinese tourists would prefer to use mobile payment overseas and that if overseas merchants supported the use of Chinese mobile payment brands, it would further increase their desire to shop. This, along with the significant rise in per capita income of residents in China and the increasing number of Chinese citizens traveling overseas, makes accepting China’s mobile payments smart business for US merchants. The number of Chinese visitors to the USA is expected to reach 6 million by 2021, according to the US Travel Association.


It is quite clear that China is way ahead of the United States in terms of mobile payments. China’s mobile payments inflation has been escalated by the adoption of smartphones, financial and on-demand services, online retail, and because of being the world’s largest internet market. However, the US mobile payments market has also grown over the past years, and as per The Economist, it is projected to reach $282 billion by 2021. The fundamental challenge in the USA would be to remove the fear of identity theft or data breach besides vastly enhancing contextualization and personalization of payments; and consequently, the opportunity ahead of the American payment FinTech ecosystem is to utilize the smartphone to provide a seamless mobile transaction element into the overall payment experience of the user.