Technology
China’s Digital Wallets Offer a Glimpse at the Future of Payments
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.
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’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 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.
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?
Technology
Apple’s Colossal Market Cap as it Hits $3 Trillion
Apple’s market cap recently hit $3 trillion. To put that scale into context, this visualization compares Apple to European indexes.
Creator Program
Apple’s Colossal Market Cap in Context
In January of 2019, Apple’s market capitalization stood at $700 billion.
While this was perceived as a colossal figure at the time, when we fast forward to today, that valuation seems a lot more modest. Since then, Apple has surged to touch a $3 trillion valuation on January 3rd, 2022.
To gauge just how monstrous of a figure this is, consider that Apple is no longer comparable to just companies, but to countries and even entire stock indexes. This animation from James Eagle ranks the growth in Apple’s market cap alongside top indexes from the UK, France, and Germany.
Let’s take a closer look.
Apple Takes On Europe
The three indexes Apple is compared to are heavyweights in their own right.
The FTSE 100 consists of giants like HSBC and vaccine producer AstraZeneca, while the CAC 40 Index is home to LVMH, which made Bernard Arnault the richest man in the world for a period of time last year.
Nonetheless, Apple’s market cap exceeds that of the 100 companies in the FTSE, as well as the 40 in each of the CAC and DAX indexes.
| Stock/Index | Market Cap ($T) | Country of Origin |
|---|---|---|
| Apple | $3.00T | 🇺🇸 |
| FTSE 100 | $2.90T | 🇬🇧 |
| CAC 40 Index | $2.76T | 🇫🇷 |
| DAX 40 (Dax 30) Index* | $2.50T | 🇩🇪 |
*Germany’s flagship DAX Index expanded from 30 to 40 constituents in September 2021.
It’s important to note, that while Apple’s growth is stellar, European companies have simultaneously seen a decline in their share of the overall global stock market, which helps make these comparisons even more eye-catching.
For example, before 2005, publicly-traded European companies represented almost 30% of global stock market capitalization, but those figures have been cut in half to just 15% today.
Here are some other approaches to measure Apple’s dominance.
Apple’s Revenue Per Minute vs Other Tech Giants
Stepping away from market capitalization, another unique way to measure Apple’s success is in how much sales they generate on a per minute basis. In doing so, we see that they generate a massive $848,090 per minute.
Here’s how Apple revenue per minute compares to other Big Tech giants:
| Company | Revenue Per Minute |
|---|---|
| Amazon | $955,517 |
| Apple | $848,090 |
| Alphabet (Google) | $433,014 |
| Microsoft | $327,823 |
| $213,628 | |
| Tesla | $81,766 |
| Netflix | $50,566 |
Furthermore, Apple’s profits aren’t too shabby either: their $20.5 billion in net income last quarter equates to $156,000 in profits per minute.
How Apple Compares To Countries
Lastly, we can compare Apple’s market cap to the GDP of countries.
| Country (excluding Apple) | Total Value ($T) |
|---|---|
| Apple | $3.0T |
| Italy | $2.0T |
| Brazil | $1.8T |
| Canada | $1.7T |
| Russia | $1.7T |
| South Korea | $1.6T |
| Australia | $1.4T |
| Spain | $1.4T |
| Mexico | $1.3T |
| Indonesia | $1.1T |
What might be most impressive here is that Apple’s market cap eclipses the GDP of major developed economies, such as Canada and Australia. That means the company is more valuable than the entire economic production of these countries in a calendar year.
That’s some serious scale.
Technology
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