The growth of mobile payment apps like WeChat Pay, AliPay and PayTM has been staggering. Mercator Advisory Group took a look at this market last year in a report, Asian Mobile Payment Apps as a Way of Life: A Look at Alipay Paytm and WeChat Pay. An article in Techwire Asia this week reports that use of these aps has nowhere to go but up as the middle class is Asia acquires more wealth, as older populations adopt mobile and as internet services extend further and further into rural locations. Forecasts issued by Frost & Sullivan expect the use of these payment apps to expand to $97 Trillion by 2023:
According to Frost & Sullivan, low credit card usage and the increasing popularity of e-commerce, coupled with a growing middle class have accelerated the growth of mobile payments in the country.
However, analysts and payments companies believe that seniors, who are a large part of the country’s population, represent, will be a great opportunity in the coming months. Further, rural China too will be a big market for payments companies.
Forecasts issued by Frost & Sullivan suggested that the market of mobile payments services in China will grow at a compound annual growth rate (CAGR) of 21.8 percent from 2017 to 2023, growing three-fold from US$29.93 trillion to US$96.73 trillion.
The total number of active mobile payment customers is also expected to reach 956 million by 2023 from 562 million in 2017 which will attract additional investments from mobile payments market participants.
Frost & Sullivan’s forecasts are in line with its peers. Think tanks such as McKinsey and Bain & Co too see potential and growth in China’s mobile payments industry.
It’s a bit maddening that payment apps in the west have been unable to make a significant dent in this massive market. In China, the market is relatively closed and in India, attempts by solutions like Google Pay just haven’t gotten the traction of other apps. The focus in the U.S. has been relegated to merchant acceptance of these apps for travelers from Asia.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group
