China's Alipay and WeChat Pay: Reaching Rural Users

19 December 2017
In cities [in China], Alipay and WeChat Pay have become ubiquitous tools for merchant payments.
A profound behavior change is happening in China’s cities. Smartphone-enabled mobile payments are becoming seamlessly integrated into everyday life for people from the young to the elderly.
It is hard not to be struck with how matter-of-factly Chinese scan a QR code to pay for everything from haircuts to vegetables at market. Indeed, China is awash with those black-and-white static-filled squares.
This development is largely thanks to AliPay and WeChat Pay. These two dominant Chinese providers have been able to bridge the gap between the digital and physical worlds. Chinese cities offer a glimpse of a truly cashless future, where people's relationship to financial services is changing forever. 
However, this is only part of the story. Around 13 percent of the world’s population, or about half of all Chinese, live in rural areas, where these services have not penetrated to the degree that they have in cities. This represents an enticing opportunity.
This Brief explores the emergence, similarities, and differences between China's Alipay and WeChat Pay and the affects these elements may have on the way they compete in the rural arena. Lessons learned here are likely to have far-reaching consequences far beyond China’s borders.