It is crucial that we have some perspective on what will happen if digital payment methods become cheap and flexible.
China was primarily a cash society. But within a few years, the country was propelled into the era of digital payments and services thanks to its simplicity, ability to connect directly to users’ bank accounts (without the need for a credit card in the middle), low transaction fees (0-0.1% for peer-to-peer transfers, less than 1% for merchant payments), ease of use (no panama mobile database specific currencies for retailers), instant payments (no speed fees) and confirmations, and use of universal standards (QR code-based payments). This in turn made it easy for Tencent to also build up a domestic video game industry, something that would have been very difficult given the lack of credit cards across Asia.
Alibaba had a different beginning, as a marketplace, but the need to pay for goods digitally led to the same outcome. The company’s Alipay system is now a major competitor to WeChat, having surpassed PayPal in 2013 to become the world’s largest mobile payments network (and charging just 0.55% in fees).
As a result, Tencent, Alipay, and more recently Sea Limited (through its gaming products) have become some of the largest digital payment and virtual currency management systems in the world and appear poised to continue as long as their governments allow them to.