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China’s Third-Party Mobile Payment Market Keeps Growing

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China’s mobile-payment volumes continue to surge

China’s mobile payments reached a whopping 81 trillion Chinese yuan (~$12.8 trillion) in the first ten months of 2017, 38% higher than the total recorded for the whole of 2016, according to Xinhua News Agency.

China (FXI) has seen rapid expansion in its mobile payments and is also the world leader in terms of mobile payments. The value of third-party e-payments in the country has grown at an annual rate of over 100% since 2015, according to a report by global rating agency Moody’s. The report notes that this growth has spurred online personal consumption, as consumers have more payment choices at lower transaction costs.

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Mobile payments facilitate consumption growth in China

Mobile payments have made it convenient to order food, pay bills, and purchase products roadside without having to carry a wallet in China. This convenience, along with the country’s growing middle class, has driven consumption in the country, benefiting e-commerce companies such as Alibaba (BABA) and JD.com (JD).

Alibaba’s AliPay and Tencent’s (TCEHY) TenPay are the major players in the mobile-payment market in China.

Alibaba’s stock price has risen 2.6% YTD (year-to-date) and a whopping 190% in the last two years, propelling its market cap to nearly $500 billion. Meanwhile, Tencent has also been on a stellar run, rising 3.1% YTD and a staggering 219.4% in the last two years.

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