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China’s Digital Wallets Offer a Glimpse at the Future of Payments

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Chinese consumers conduct 11 times more mobile payments than their counterparts in the United States, so as we look to the future of digital wallets, China is a natural place to start.

Mobile Payments USA vs. China

Forecasts for mobile payment adoption in the United States remain flat for now; however, two major brands – WeChat and AliPay – offer a glimpse of what the future may eventually hold for mobile payments in North America.

Digging Through WeChat’s Wallet

WeChat, a platform owned by Tencent, is a force to be reckoned with. It’s fast closing in on one billion monthly active users (MAUs), and the average user spends over an hour on the app each day.

WeChat users aren’t just unusually chatty – there’s actually a high level of utility to the platform that North American apps have yet to match. WeChat’s wallet alone is packed with features ranging from mobile payments to ride hailing. Below is a look at just some of the features.

WeChat Overview

WeChat’s wallet is packed with features that are constantly evolving, but here are some current features worth noting:

Payments in the real world
“Scan-and-pay” is widely popular in China, particularly in big cities where it’s hard to find a product or a service that cannot be purchased with a mobile device. According to China Channel, over 90% of Chinese consumers have adopted WeChat as a method of payment in offline purchases. That compares with a 32% adoption rate for debit and credit cards.

Red Packets
WeChat has seen tremendous growth of its wallet by capitalizing on China’s tradition of gifting cash-filled red envelopes (known as hongbao). In fact, the volume of digital red packets sent has skyrocketed from 16 million to 14.2 billion in only three years.

Digital red packets

Digital Tip Jar
WeChat also offers a glimpse at a new avenue for content creators to monetize their hard work online. WeChat’s Tip Jar feature allows users to send micro-payments to writers, musicians, artists, and more.

Go Dutch
Splitting the bill in a busy restaurant or pub setting can be major hassle. “Go Dutch” is a feature that allows WeChat users to divvy up a bill and pay using the app. Features like Go Dutch make digital payments an appealing option because they solve a real world problem.

Third-Party Apps
WeChat has robust third-party integration within its wallet. Functionality is so deep that users can order anything from transportation to home cleaning services with the push of a button. China’s largest e-commerce, group buy, and ride hailing companies are already on these platforms, but Western brands like Starbucks are getting in on the action too.

Going Head-To-Head

The mobile payments sector is becoming increasingly binary as WeChat and AliPay dogfight for market share. AliPay – Ant Financial’s payment brand – was once the undisputed leader in mobile payments, but the company has recently seen its market share eroded by an increasingly scrappy WeChat. WeChat has smartly leveraged its popularity and massive user base to get people using it as a payment tool as well.

Market share of digital wallets

ApplePay, which had high hopes for the Chinese market, continues to lag far behind domestic brands.

Growing Pains for Digital Wallets

China’s central bank recently imposed tougher rules regarding scan-and-go payments, a move that Ant Financial and Tencent are publicly praising, but that may dampen the meteoric growth trajectory of mobile payments. The new regulations take aim at aggressive tactics used to capture market share from competitors, and set limits on how much consumers can spend daily using barcode-based payments.

Despite growing pains, mobile payments and digital wallets will continue to be a dominant part of the Chinese economy. The only question is, when will the rest of the world follow suit?

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Ranked: The Top Startup Cities Around the World

Here are the global startup ecosystem rankings, highlighting the scale and maturity of major tech hubs worldwide.

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This bar chart shows the top startup ecosystems in the world in 2024.

The Top Startup Cities Around the World

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

A richly connected network of founders, venture capital firms, and tech talent are some of the key ingredients driving a startup ecosystem.

As engines of growth, these tech clusters are evolving on a global scale. While the world’s leading startup cities are concentrated in America, several ecosystems, such as Beijing and Seoul, are growing in prominence as countries focus on technological advancement to spur innovation.

This graphic shows the best startup cities worldwide, based on data from Pitchbook.

The Global Startup Ecosystem Rankings

To determine the rankings, each city was analyzed based on the scale and maturity of their startup ecosystem over a six-year period ending in the second quarter of 2023.

Among the inputs analyzed and used to calculate the overall development score were fundraising activity, venture capital deals, and exit value:

RankCityDevelopment ScoreCapital RaisedDeal CountExit Value
1🇺🇸 San Francisco90$427.6B19,898$766.3B
2🇺🇸 New York76$179.9B13,594$171.7B
3🇨🇳 Beijing76$161.2B8,835$279.2B
4🇨🇳 Shanghai73$130.3B7,422$186.8B
5🇺🇸 Los Angeles71$144.6B9,781$181.4B
6🇺🇸 Boston70$117.0B6,044$172.8B
7🇬🇧 London64$99.0B11,533$71.9B
8🇨🇳 Shenzhen63$46.4B5,020$66.3B
9🇰🇷 Seoul61$31.1B6,196$71.0B
10🇯🇵 Tokyo60$26.2B5,590$28.0B
11🇨🇳 Hangzhou59$50.7B3,361$88.7B
12🇺🇸 Washington D.C.55$43.7B2,706$28.2B
13🇺🇸 Seattle54$31.7B2,693$35.6B
14🇸🇬 Singapore52$45.7B4,507$38.0B
15🇺🇸 San Diego52$33.5B2,023$44.7B
16🇺🇸 Austin52$26.4B2,636$22.9B
17🇨🇳 Guangzhou52$24.7B1,700$24.0B
18🇮🇱 Tel Aviv51$21.0B1,936$32.2B
19🇺🇸 Denver51$26.8B2,489$29.9B
20🇩🇪 Berlin50$31.2B2,469$15.9B

San Francisco dominates the pack, with $427.6 billion in capital raised over the six-year period.

Despite a challenging funding environment, nearly 20,000 deals closed, highlighting its outsized role in launching tech startups. Both OpenAI and rival Anthropic are headquartered in the city, thanks to its broad pool of tech talent and venture capital firms. Overall, 11,812 startups were based in the San Francisco Bay Area in 2023, equal to about 20% of startups in America.

Falling next in line is New York City, which raised $179.9 billion over the same time period. Crypto firm Gemini and machine learning company, Hugging Face, are two examples of startups based in the city.

As the top-ranking hub outside of America, Beijing is home to TikTok’s parent company, ByteDance, which is one of the most valuable private companies in the world.

In recent years, much of the startup funding in China is being driven by government-backed funds. In particular, these funds are focusing heavily on “hard tech” such as semiconductor-makers and electric vehicle companies that align with the government’s strategic long-term goals.

Another leading tech hub, Singapore, has the highest venture capital funding per capita worldwide. In 2023, this was equal to an impressive $1,060 in venture funding per person. By comparison, venture funding was $345 per person in the U.S., the second-highest globally.

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