The swiftness with which technology has developed, followed by cost decline is giving room to commoditization, allowing countries to leapfrog into using the latest tools instead of adapting gradually.

A manifestation of this phenomenon was the rapid adaptation of cellular phones in Latin American countries, where owning a landline in the late 1990s was a luxury. This was due to costly and scarce infrastructure that was owned mostly by local governments.

Fast forward to 2021, and we see the quick adoption of Digital Wallets with their many features. For starters, cybersecurity is a given by the token encryption system. Speed of transaction and reduced merchant costs add to convenience when it comes to payment of goods and services, as well as the ability to transfer money from any location within seconds. Personal safety is also a priority where the consumer is protected even if they happen to lose their phone. This concern rings especially true in the context of COVID-19when contact with POS machines is eliminated.

Digital Wallets also minimize interruptions caused by lost, stolen, or expired cards. They can also replace modern card-issuing platforms, and empower third parties, employees, customers, and contractors to make payments on their behalf.

This technology’s Leap Frog is more evident in China. I have been visiting this fascinating country for both business and pleasure since 1998; a time when bicycles and Mao suits were still very much a part of the regular landscape.

During my last three visits, I noticed fewer bicycles, more Ferraris, and the rapid growth of Mobile Payment utilizing (near-field communication), as well as QR codes, which do not depend on internet connectivity. In 2018, around 83% of all payments were made via mobile payment modes.




Data from the People’s Bank of China (PBOC) in 2020 shows the number of electronic payments processed by the country’s banks increased by 6.3% compared to the same period in 2018. 62.1 billion electronic payments have been registered, including 30.7 billion mobile transactions, representing a year-on-year increase of 73.6%. By March 2020, 1.1 billion people were using mobile payment in China.


China’s ecosystem of onsite payments and e-commerce transactions is led in 2020 by three major players; WeChat (92%), Alipay (91%), and UnionPay (74%).


You might ask why Digital Wallets matter to your business in the US, Lat-Am, or Europe?

A survey from indicated that around 80 million Americans use Digital Wallets because of how convenient they are. They can leave cash and credit cards at home!

Data from Merchants and Markets forecasts the market size of global digital payment to grow from $79.3 billion in 2020 to $154.1 billion by 2025, at a Compound Annual Growth Rate (CAGR) of 14.2%.

By 2025, Digital Wallets are expected to become the most preferred method of payment among millennials.

The United States is one of the most popular international destinations for Chinese travelers. In Europe,10 countries have signed a partnership between six Digital Wallet providers and Alipay.

As an e-commerce merchant, you should be attracted to the lower cost per transaction. WeChat’s average merchant processing fee is 0.6%, Alipay has an average merchant fee of 0.55%, whereas UnionPay has an average merchant fee of 0.8%.


The average card-present fee in North America is approximately 2.2%; card-not-present fee is roughly 3.5%. The evidence is clear; North American merchants are paying a lot more to process each transaction.

In conclusion, if you want to be a global e-commerce player utilizing a secure system that improves your revenue and bottom line, while expanding your customer reach, you should join China’s payment ecosystem immediately.

We would like to hear from you. Join The e-Comm Minute™ conversation by sending your thoughts or topics you would like us to address in future articles to: [email protected], or call us at: (716) 225-2920.

Francisco A. Arinci

Head of Digital Strategy

Lievant US




Data Sources:

Payment & Clearing Association of China

People’s Bank of China

Quartz: John Detrixhe

Merchants and Markets

Statista, Xinhua, China Plus, Tech in Asia