China's fintech industry shows where the rest of the world is heading

China's overall fintech market is now worth up to $2.2 trillion, reports Tech in Asia

“We need banking but we don’t need banks anymore,” said Bill Gates two decades ago, predicting the explosion in start-ups creating web and app-based financial services that we’re seeing right now.

With nearly $11 billion last year invested into so-called fintech startups across Asia, the sector is rivaling online shopping and ride-hailing among the hottest tech arenas.

As this seismic shift takes place, nowhere is it more visible than in China.

At a Starbucks in Shanghai, a punter pays for coffee with a messaging app, waving their phone in front of a barcode scanner. At the sushi joint next door, a customer settles the bill with a mobile wallet app; after lunch, she pays an electricity bill with the same app, and then moves some of her salary into a high interest personal fund. No notes are counted out, no coins bounce and clatter into cash registers, no-one queues at the bank.

“The country leads the world when it comes to total users and market size,” observed a McKinsey report last year about China’s fintech boom, with people entrusting $1.8 trillion in 2015 to online finance services of all shapes and sizes.

China’s overall fintech market is now worth up to $2.2 trillion.

China’s shoppers pay with their phones more so than people in any other country – a record 195 million did so for in-store and online payments in 2016, rising to an anticipated 332 million in 2020, says Emarketer.

In China, mobile payments have proved to be a gateway drug for more hardcore fintech services, showing that getting people into wallet apps and giving them a real-world and convenient use case is the first and highest barrier.

This is an excerpt from the article published on Tech In Aisa. You can read the full article here