In many places, if you leave the house without your wallet, you’ll be in a tough spot all day. No way to pay for food, transportation or any of life’s other necessities.
But in China’s largest cities, you can definitely survive without carrying a pocket full of cash and credit cards — as long as you’ve got your smartphone.
When I lived in the United States, I didn’t pay cash very often but I always carried my credit or debit cards. I wrote checks for my rent and paid most of my bills online.
China’s fast-developing mobile commerce industry is estimated to dwarf that of the U.S., so I set out to see how far a phone would get me in the country’s capital.
Admittedly, I was a bit skeptical about going an entire day Beijing without my wallet, but I was surprised to discover just how easy and convenient it is.
I pay for breakfast by scanning a QR code on the window of a hole-in-the-wall restaurant that sells jianbing, a delicious fried crepe that’s one of China’s most popular street breakfasts. My purchase costs 6 yuan (about 93 cents) and takes just a few seconds. All I have to do is input a password and the transaction is complete.
At a nearby coffee shop, the barista scans a QR code on CNN news assistant Shen Lu’s phone.
As we sip our coffee, Shen Lu pays her household water bill at the table. In seconds, she is able to transfer funds from one of several linked accounts. She regularly uses the same simple process to pay other bills and even her rent.
In Beijing, I can also pay by phone for movie tickets, takeout food and to shop for goods for delivery.
I use my phone to hail a taxi so I can meet Gu Yu, co-founder of a new payment app, Mileslife. Ride sharing using a mobile payment app allows us to save money by ordering multiple taxi stops and splitting the fare at the end.
Gu says many urban Chinese don’t even bother with credit cards because they prefer to pay by phone.
“It’s what I’d call a late development advantage. China doesn’t have a really lucrative credit card system,” he says. “So Chinese just skipped credit cards and went to mobile payments.”
As we ride around Beijing, Gu points out the advantages of mobile payments. No coins or crumpled bills that can be lost or stolen, electronic receipts, the ease of keeping track of spending — and of course, no bulky wallet.
After arriving at our destination in Beijing’s trendy Sanlitun area, we eat lunch and split the check — also using our phones.
From tiny street vendors to large chains, a huge number of businesses in Beijing accept mobile payments, mostly through popular apps Alipay and WeChat.
Alipay is tied to Alibaba, the Chinese e-commerce titan. WeChat, developed by Tencent, is one of the biggest standalone messaging apps in the world with nearly 700 million active users.
Hundreds of millions of Chinese use Alipay and WeChat to make payments with their phones, and the market is growing fast.
Research firm eMarketer has estimated retail sales on mobile devices in China rose 85% to around $334 billion in 2015. That makes the Chinese market more than four times the size of the U.S. one, the firm says.
Part of the appeal of mobile payments for companies is the ability to track customers’ spending habits. But in China, the government heavily monitors and censors social media apps, including mobile commerce.
“I think normal citizens don’t worry” about their activities and spending being monitored, Gu says. “I think human rights activists have huge concerns.”
The next frontier for the industry is expansion beyond big Chinese cities.
Much of rural China still relies on cash. Despite China’s slowing economy, the huge untapped population of hundreds of millions of people represents a big opportunity for mobile payment companies.
