 "China’s fintech industry shows where the rest of the world is heading")
“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.
