Earlier this week, the People’s Bank of China (PBoC) published details about payment processing in 2019. The figures showed massive growth in mobile payments, with the number of transactions up 68%, although the Yuan amount had a more modest growth of 25.13%.
The statistics are worth watching as the PBoC prepares to launch a central bank digital currency (CBDC). The drivers for a CBDC include a combination of the drop in cash usage and shift of consumers to using Alipay and WeChat Pay mobile wallets for payments. Another CBDC motivation was the fear of a global payment system such as Facebook’s Libra. Plus, there’s a desire to denominate more international trade in renminbi rather than U.S. dollars.
The shift from cash to mobile payments was further highlighted by the 19% decline in cash withdrawal transactions using a bank card. The number of ATM machines decreased by 1.56% when measured by machines per 10,000 people. And on the same measure, Point of Sale equipment was down by 9.88%, an indicator of the shift to mobile wallets.
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