Nine in ten Chinese mobile internet users (92%) choose mobile payment apps such as WeChat Pay as their primary offline payment method today, research released by Tencent Online Media Group’s newly launched research project China Tech Insights reveals, while “smartphone built-in payment tools” such as Apple Pay are currently used by approximately 12%.
The penetration rate of mobile payments amounts to 94.1% in first-tier cities — much higher than those of cash and credit and debit cards. For first-tier city dwellers, 38.6% choose cash as a primary method to make payments, while the proportion reaches approximately 50% for those living in third-tier cities and below.
Monthly transaction volumes made through WeChat Pay are also “increasing rapidly” compared to 2015, the 2017 WeChat User and Business Ecosystem Report finds. Around 65% of users were spending less than 500 RMB (US$72) per month in 2015, compared to fewer than 40% last year.
Speed is cited as the main reason for using mobile payments for offline transactions by nearly 60% of the survey’s respondents. Some 55% use them because they’re easy, while approximately 45% use them because they don’t carry cash on them at all. Around 16% use mobile payments because they can “enjoy discounts” while 5% do so because they can accumulate loyalty points.
Supermarkets and convenience stores are the most popular places for WeChat Pay transactions, followed by online shopping, restaurants and food, malls, utilities fees, transportation and travel, entertainment and leisure, public departments, beauty and fitness salons and hospitals.
“In this survey, consumers’ usage of WeChat Pay in small merchants like convenience stores tops all use cases which also implies the significance of offline expansion to the growth of WeChat Pay,” says China Tech Insights.
“As WeChat Pay expands among small and mid-size merchants such as convenience stores and supermarkets, the entire WeChat ecosystem — including third-party services providers and vendors — will all benefit from this, and bring more interests to the real economy of the country.”
The data in this report was collected from an online survey completed by China Tech Insights in March 2017, along with a 2016 study by China Academy of Information and Communications Technology (CAICT). 19,511 samples were collected for the March survey, while CAICT’s study covered 1,100 users and 9,018 WeChat public account operators.