As India embarked on cashless economy with demonetisation of high value notes, smartphones could help in the country’s de-cashing drive like in China where online payment through phones have become order of the day, Chinese media said today.
“While India is implementing the government-led de-cashing via demonetisation, China is experiencing a rapid market based de-cashing process via the digitalisation of transactions on the online or mobile payment platforms,” an article in the state-run Global Times said today.
In the most recent 11/11 (Singles Day) online shopping day, consumers spent 120.7 billion yuan (USD 18 billion) on Tmall, the largest business-to-customer shopping website in China, with all transactions settled via Alipay, the online payment platform set up by Alibaba Group, the article said.
“Meanwhile, Alipay and WeChat Pay (the online payment platform of WeChat by Tencent) are widely accepted by restaurants, shops and even grocers throughout the country,” it said.
The high ownership rate of smartphones in China may explain this rapid digitalisation in transactions, it said, citing a recent survey by Pew Research Centre, which said smartphone ownership rate is 58 per cent in China, 37 per cent in Japan and 17 per cent in India.
“This high ownership rate plus a relatively slow growth rate in credit card ownership has led to the ‘leapfrog development’ of de-cashing in China,” the article said.
“Compared to traditional bank transfers, online payment systems are usually more convenient and user friendly. Hence, market-based de-cashing faces much less resistance than other types of de-cashing,” it said.
“India is currently the largest growing market for smartphones and it is estimated that the number of smartphones sold in the country is very likely to be greater than 100 million in 2017,” it said, pointing to high sales witnessed by Chinese phone makers like Xiaomi.
“If India would like to try the Chinese style of de-cashing through online/smartphone payment, it is very likely to be beneficial to both countries,” it said.