The mobile payments sector is enjoying flourishing growth in China, with non-bank fintech players beating out the established bricks and mortar banks.
The latest “China Payment and Clearance Sector Operations Report (2017)” released by the Payment & Clearing Association of China points to rapid growth in the mobile payments sector, amidst steady growth in new payment business as well as a surge in non-cash transactions.
The total number of non-cash payment transactions in China leaped by 32.64% last year to reach 124.1 billion, representing a growth rate that is five times the global average.
According to PCAC payment transactions in China are shifting from home computers to mobile devices, with long-distance payments comprising the vast majority of such operations.
China is seeing steady growth in the number of mobile payment customers, while proximity payments for selected merchants are enjoying an especially strong increase.
The surging popularity in mobile and online payments is shaking up the structure of the sector to favour non-bank financial institutions.
In 2016 non-bank financial institutions processed a total of 97 billion transactions with a total value of 51 trillion yuan, for year-on-year growth of 143% and 132% respectively.
In stark comparison domestic commercial banks processed 25.7 billion transactions, for year-on year growth of 85.82%. These banks accounted for greater total transaction value, however, at 157 trillion yuan.
PCOC notes that non-bank fintechs are preferred for smaller transactions, with an average transaction sum of 817 yuan for online payments and 525 yuan for online payments.
This stands in sharp contrast to the average size of online and mobile bank transactions, which were 45,150 yuan and 6,127 yuan respectively in 2016.