Market Size of China Payments Industry
Study Period | 2019 - 2029 |
Base Year For Estimation | 2023 |
Market Size (2024) | USD 40.27 Trillion |
Market Size (2029) | USD 60.24 Trillion |
CAGR (2024 - 2029) | 8.39 % |
Market Concentration | High |
Major Players*Disclaimer: Major Players sorted in no particular order |
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China Payments Market Analysis
The China Payments Market size is estimated at USD 40.27 trillion in 2024, and is expected to reach USD 60.24 trillion by 2029, growing at a CAGR of 8.39% during the forecast period (2024-2029).
The primary factors driving the market's growth in the region are the cashless society, huge E-commerce market, and high penetration of mobile and online payments, among others.
- China has developed differently in terms of payment methods; while others countries have switched from cash to credit cards and are now switching to mobile phones, China has skipped a step. Credit card usage in China is significantly less, especially for E-commerce.
- Chinese major players Alibaba and Tencent have a significant share in digital merchant payments by introducing AliPay and WeChat Pay and have driven the shift away from cash in the Chinese economy. The companies see digital payments not as a goal but as an entry point to a vast ecosystem of offline and online goods and services.
- The country's rapid shift in payment infrastructure is driven by widespread bank account and smartphone ownership in China. Also, mobile payments have been so successful in China because they are fast and straightforward and are driving the payments market in China. And this speed is possible because of the QR codes. In China, QR Codes are available everywhere, at every shop.
- Boosted by the growth of smartphone adoption and increasing internet penetration, especially in China, mobile payments have taken off since the onset of the pandemic. Naturally, online sales have rocketed for goods or digital services. The paradigm shift to digital ways of making payments has profoundly impacted the way many companies do business.
- China's approach to regulating fintech includes three points: Firstly, financial businesses in the region must be licensed to operate. Secondly, companies like insurance and wealth management must set up firewall security to prevent cross-sector risks. Finally, the link between non-banks and banking information services must be cut. The central bank has also required fintech businesses to set up holding companies and to include all subsidiaries engaged in financial activities.
- In December last year, the Bank of China (Hong Kong), the city's note-issuing bank, took the initiative in encouraging the usage of digital yuan (e-CNY), giving e-laisse incentives to consumers who register to use it. BOCHK is distributing red packet rewards worth 100 e-CNY, which can be utilized to purchase goods at 14 physical stores of grocery chain U Select around the city, to encourage people to test the digital currency.
- During the COVID-19 pandemic in China, the Payment & Clearing Association of China (PCAC) launched an action on 28 February 2020 to encourage people in mainland China to use mobile payment, online payment, and QR payment to avoid the risk of COVID-19 infection. This resulted in a rise in mobile and online payments in the region during the pandemic and is likely to grow further in the coming years.
China Payments Industry Segmentation
The China Payments Market is segmented by Mode of Payment (Point of Sale (Card Payments, Digital Wallet, Cash), Online Sale (Card Payments, Digital Wallet)), and by End-user Industries (Retail, Entertainment, Healthcare, Hospitality). E-commerce payments include online purchases of goods and services, such as purchases made on e-commerce websites and online booking of travel and accommodation. The scope of the market excludes online purchases of motor vehicles, real estate, utility bill payments (such as water, heating, and electricity), mortgage payments, loans, credit card bills, or purchases of shares and bonds. As for Point-of-Sale, all transactions that occur at the physical point of sale are included in the scope of the market. It includes traditional in-store transactions and all face-to-face transactions regardless of the location of the transaction. Cash is also considered for both cases (cash-on-delivery for e-commerce sales).
The study tracks key market metrics, underlying growth influencers, and significant industry vendors, providing support for China's market estimates and growth rates throughout the anticipated period. The study looks at COVID-19's overall influence on the China payment ecosystem.
The market sizes and forecasts are provided in terms of value (USD million) for all the above segments.
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China Payments Market Size Summary
The China payments market is experiencing significant growth, driven by the rapid adoption of digital and mobile payment solutions. The country's unique progression in payment methods has seen a swift transition from cash to mobile payments, bypassing the traditional credit card phase. This shift is largely attributed to the widespread use of smartphones and the prevalence of QR codes, which facilitate quick and easy transactions. Major players like Alibaba and Tencent have dominated the market with their platforms, Alipay and WeChat Pay, respectively, which have become integral to both online and offline transactions. The pandemic further accelerated this trend, as consumers increasingly turned to digital payments to avoid physical contact. The regulatory landscape in China is also evolving, with the central bank implementing measures to ensure the security and stability of fintech operations, including the requirement for licensing and the establishment of holding companies for financial businesses.
The market is characterized by a high level of mobile commerce, with a substantial portion of e-commerce transactions conducted via smartphones. This has led to the emergence of new payment service providers, posing challenges to traditional banking institutions. The Buy Now, Pay Later (BNPL) model is gaining traction, supported by low interest rates and the popularity of digital payment solutions. The market remains consolidated, with a few key players holding significant shares and continuously innovating to enhance their offerings. Initiatives like the Digital Yuan and environmentally friendly financial products reflect the ongoing integration of digital currencies and sustainable practices in the payment ecosystem. As the market continues to evolve, the focus on seamless, secure, and sustainable payment solutions is expected to drive further growth and transformation in the coming years.
China Payments Market Size - Table of Contents
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1. MARKET INSIGHTS
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1.1 Market Overview
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1.2 Industry Stakeholder Analysis
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1.3 Industry Attractiveness- Porter Five Forces
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1.3.1 Bargaining Power of Suppliers
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1.3.2 Bargaining Power of Buyers/Consumers
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1.3.3 Threat of New Entrants
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1.3.4 Threat of Substitute Products
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1.3.5 Intensity of Competitive Rivalry
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1.4 Evolution of the payments landscape in China
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1.5 Key market trends pertaining to the growth of cashless transaction in China
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1.6 Impact of COVID-19 on the payments market in China
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2. Market Segmentation
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2.1 By Mode of Payment
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2.1.1 Point of Sale
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2.1.1.1 Card Payments (includes Debit Cards, Credit Cards, Bank Financing Prepaid Cards)
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2.1.1.2 Digital Wallet (includes Mobile Wallets)
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2.1.1.3 Cash
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2.1.1.4 Others
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2.1.2 Online Sale
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2.1.2.1 Card Payments (includes Debit Cards, Credit Cards, Bank Financing Prepaid Cards)
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2.1.2.2 Digital Wallet (includes Mobile Wallets)
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2.1.2.3 Others (includes Cash on Delivery, Bank Transfer, and Buy Now, Pay Later)
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2.2 By End-user Industry
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2.2.1 Retail
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2.2.2 Entertainment
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2.2.3 Healthcare
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2.2.4 Hospitality
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2.2.5 Other End-user Industries
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China Payments Market Size FAQs
How big is the China Payments Market?
The China Payments Market size is expected to reach USD 40.27 trillion in 2024 and grow at a CAGR of 8.39% to reach USD 60.24 trillion by 2029.
What is the current China Payments Market size?
In 2024, the China Payments Market size is expected to reach USD 40.27 trillion.