The China digital wallet market was valued at US$17.120 billion in 2020 and is predicted to grow at CAGR at 20.44% to reach the market value of US$62.919 billion in 2027.
The high penetration rate of smartphones and faster internet connectivity are the major contributing factors to China's booming digital wallet market. According to the latest 2020 statistics by the People’s Bank of China (PBOC), the number of electronic payments processed by the country’s banks surged by 6.3% compared to the same period in 2018. In March 2020, 776.08 million people were using mobile payments in China. The shortage of point-of-sale (POS) machines and ATMs compared to the country’s mushrooming population also encourages the usage of digital wallets to make cashless payments, thereby driving the market growth. People who need quick and easy transactions are Digital wallet systems from WeChat. Alipay is increasingly using digital wallet systems like WeChat used by people who need prompt and Alipay easy transactions. The booming e-commerce industry is another driver of the digital wallet market in China. Stricter regulations regarding scan-and-go payments to maintain secure and safe transactions will further encourage the use of digital wallets in China during the forecast period.
China's D digital wallet market has been segmented based on the device and application. The market has been segmented as PCs, /laptops, and smartphones by the device. By application, China's digital wallet market has been classified into Money transfer, recharge, movie booking, food ordering, etc.
The recent COVID-19 pandemic in China has pushed an increase in the usage of many types of digital wallets. With government regulations of strict social distancing, people have started using mobile payment, QR payment, and online payment, making every transaction cashless and touchless, which has positively impacted the market growth of digital wallets in the country. Furthermore, the government is set to launch the world’s first digital currency under the digital currency/electronic payment (DC/EP) project, which will be disbursed via a digital wallet. An increase in digital payments resulted from increased adoption during the lockdown owing to covid-19. Examples are online grocery stores, OTT players, EdTechs, online gaming, recharges, online pharmacies, and utility/bill payments. The authority is also boosting digital payment volumes by promising monetary assistance to the poor via direct payments to bank accounts. Due to the lockdown and reluctance to exchange cash, wallets have also gained traction from peer-to-peer transfers, bill payments, and peer-to-peer payments for essential public services.
On January 2022, The People's Bank of China launched a digital yuan wallet application. China's state grid has completed the first digital yuan innovative contract payment in the solar energy industry.
On April 2021, PayPal launched a wallet in China that will concentrate on cross-border payments and not contend directly with local firms. PayPal is the first foreign company to entirely own a transactions platform in China.
On April 2020, China central bank's digital wallet was launched. The app's payment feature allows scanning a barcode to make retail transactions, send Money, request a payment, and use touch phones for peer-to-peer payments.
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