How important are card-not-present payments in China and, by extension, the rest of the world? A new United Nations study found that just between online payments platform Alipay and messaging platform WeChat Pay in 2016, Chinese consumers conducted $2.9 trillion in digital payments—20 times what they were only four years ago. According to the report from the U.N. and its Better Than Cash Alliance, digital payments are the main driver of financial inclusion in China and the emerging economies of many of its neighbors.
“Social networks and e-commerce platforms are growing in every economy, whether large or small,” says Ruth Goodwin-Groen, managing director of the Better Than Cash Alliance. “In China digital payments are thriving from these channels, bringing millions of people into the economy. This matters because we know that when people—especially women—gain access to financial services, they are able to save, build assets, weather financial shocks and have a better chance to improve their lives.”
The report said the benefits for digital financial services accrue to individuals in the form of increased opportunities to invest and save and to small merchants in the form of more access to capital they can use to expand their businesses. Payments via messaging and e-commerce, despite their already torrid growth, will continue to increase rapidly. By 2025, the report said, these two forms of CNP payment will add $236 billion to China’s GDP.
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