More people in China are adopting digital wallets due to growth in eCommerce, proliferation of smartphones and increase in mobile payment technologies.
A new report from Forrester Research by senior analyst Vanessa Zeng shows that digital wallets have become a convenient payment option for consumers in China.
More number of mobile operators and financial institutions encourage use of this technology in the nation where Central Bank policies determine the market access of third-party payments.
The Central Bank has unified mobile payment standards, and this has improved compatibility of digital wallets offered by the different players. These policies have contributed in successfully lowering the cost of adoption of digital wallets.
Internet giants, Alibaba and Tencent, have worked towards cultivating the mobile payment habits of their consumers. Both have introduced powerful payment systems and promoted them to encourage rapid end user adoption of their digital wallet solutions.
Merchants in China tend to adopt the digital wallet solutions of other vendors instead of developing them in house. The top three payment service providers in China are Alipay, Lakala, and Tenpay.
Zeng advises businesses in China to evaluate consumers' needs, marketplace options, and design a digital wallet strategy to improve return on investments.
Organisations should select the mobile wallet that's the right fit for their business. They have the option of choosing from remote-only digital wallets, proximity-only digital wallets, and omni-channel digital wallets.
Each of these wallets is characterized by a unique capability and positioning in the market.
Businesses should also understand the factors that influence consumers' usage of digital wallets to adopt the right solution.