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Payment Preferences - China - September 2016

Published By :

Mintel

Published Date : Sep 2016

Category :

Banking

No. of Pages : N/A

Chinese consumers are enjoying the benefits of mobile third-party payments way before the Western world. It is a joint result of the government support on payment development, the down-to-earth promotions of payment organisations and the open attitudes of consumers. The leading companies are exploring closer partnerships with banking institutions, domestic and overseas merchants, and foreign counterparts. In the future, the payment methods are expected to represent the users’ lifestyles and personalities.

Table of Contents

OVERVIEW
What you need to know
Covered in this Report

EXECUTIVE SUMMARY
The market
Figure 1: Market value of third-party payments, 2011-21
Companies and brands
Figure 2: Market share of third-party mobile payments, by payment value, 2015
Figure 3: Market share of third-party online payments, by payment value, 2015
The consumer
Figure 4: Type of payment methods used, May 2016
Figure 5: Mobile payment occasions, May 2016
Figure 6: Reasons for using mobile payment, May 2016
Figure 7: Key drivers of overall satisfaction with credit cards, May 2016
Figure 8: Most often used non-cash payment methods, May 2016
Figure 9: Selected mobile payment methods used, by consumer classification, May 2016
What we think

ISSUES AND INSIGHTS
How far is China from a cashless society?
The facts
The implications
What is so fascinating about mobile payment?
The facts
The implications
Where are the opportunities for payment service providers?
The facts
The implications

THE MARKET – WHAT YOU NEED TO KNOW
Rapid-growing third-party payment market
New regulations introduced to the market
New opportunity emerges on the market

MARKET SIZE AND FORECAST
Third-party payment market to reach RMB 225 trillion in 2021
Figure 10: Market value of third-party payments, 2011-21
Third-party mobile payment is gaining ground
Figure 11: Payment volume and value of banking institutions and third-party payment organisations, 2015
Slowing down growth of bank card market

MARKET DRIVERS
Subsidies for consumers using third-party payment
Lower fees on merchants
Updated third-party payment regulation
QR-code-scan payment back to operation
The introduction of pay-by-credit service by third-party organisations

KEY PLAYERS – WHAT YOU NEED TO KNOW
Alipay leads in mobile payment market but Tenpay is slicing share
Differentiated competition strategies of market players
Beyond payment methods

MARKET SHARE
Alipay is losing market share to Tenpay on mobile payment
Figure 12: Market share of third-party mobile payments, by payment value, 2014 and 2015
Stabilised competition in third-party online payment market
Figure 13: Market share of third-party online payments, by payment value, 2014 and 2015

COMPETITIVE STRATEGIES
Alipay
Tencent
China UnionPay
99Bill
Specialised in specific industries

WHO’S INNOVATING?
Apple Pay
Pay Watch by Alipay
From Google Wallet to Android Pay…
…to Google Hands Free?
The future Alipay sees

THE CONSUMER – WHAT YOU NEED TO KNOW
Mobile payments’ usage rate exceeds credit cards’
Subsidies are driving the usage but convenience is the real killer point
Under-engaged affluent consumers

PAYMENT METHODS USED
Mobile payment exceeding cards
Figure 14: Type of payment methods used, May 2016
Young adults are fans of new payment technologies
Figure 15: Type of payment methods used, by age, May 2016
Better-educated consumers tend to use more payment methods
Figure 16: Number of payment methods used, by educational level, May 2016

MOBILE PAYMENT USAGE OCCASIONS
Merchants’ support is necessary for using mobile payment methods
Figure 17: Mobile payment occasions, May 2016
The push of third-party payment organisations is driving usage
Different battlefields for mobile app payment and mobile NFC payment
Figure 18: Top five usage occasions for mobile app payment and mobile NFC payment, May 2016

REASONS FOR USING MOBILE PAYMENT
Convenience is key, discount is driver
Figure 19: Reasons for using mobile payment, May 2016
Spontaneously, rather than prompted
Thirtysomethings and men find mobile payment fashionable
Safety issue is not stopping young adults from using mobile payment
Figure 20: Selected reason for using mobile payment, by age, May 2016

NON-CASH PAYMENT PREFERENCES
Alipay rules the market
Figure 21: Most often used non-cash payment methods, May 2016
Affluent consumers stay loyal to credit cards
Potential to grow internet pay-by-credit services among young adults
High-end consumption occasions are white spaces for wallet products

SATISFACTION WITH NON-CASH PAYMENTS
Satisfaction largely aligns with usage rates
Figure 22: Satisfaction with non-cash payment methods, May 2016
Speed is good, but wider merchant supports are needed
Figure 23: Overall satisfaction with main non-cash payment methods, by payment methods, April 2016

KEY DRIVERS OF SATISFACTION WITH NON-CASH PAYMENTS
High credit limit and easy to use are advantages of credit cards
Figure 24: Key drivers of overall satisfaction with credit cards, May 2016
JD IOU’s perception is close to credit card, while Huabei stands out
Figure 25: Key drivers of overall satisfaction with JD IOU, May 2016
Figure 26: Key drivers of overall satisfaction with Huabei, May 2016
Alipay excelling in almost every aspect
Figure 27: Key drivers of overall satisfaction with Alipay, May 2016
WeChat Wallet as a valuable complement of WeChat
Figure 28: Key drivers of overall satisfaction with WeChat Wallet, May 2016
China UnionPay Wallet to highlight supportive merchants
Figure 29: Key drivers of overall satisfaction with China UnionPay Wallet, May 2016

MEET THE MINTROPOLITANS
Mintropolitans triple the usage of mobile NFC payment
Figure 30: Selected mobile payment methods used, by consumer classification, May 2016
More MinTs choose credit cards as first payment choice than non-MinTs
Figure 31: Selected most often used non-cash payment methods, May 2016
MinTs are paying more attention to safety

APPENDIX – MARKET SIZE AND FORECAST
Figure 32: Market value of third-party payments, 2011-21

APPENDIX – MARKET SEGMENTATION
Figure 33: Market value of online third-party payments, 2011-21
Figure 34: Market value of mobile third-party payments, 2011-21

APPENDIX – METHODOLOGY AND ABBREVIATIONS
Methodology
Key driver analysis methodology
Figure 35: Satisfaction with different aspects of main non-cash payment methods, April 2016
Fan chart forecast
Abbreviations

List of Table

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