Europa Newswire - Editorial Image Licensing Agency

No Cash Alliance Releases Report on Digital Payments in China - Europa Newswire

May 26, 2017 News, United Nations , , , , , , , , , , Comments are off

by Britta Schmitz


UNITED NATIONS, May 27 2017 – ‘Social Networks, e-Commerce Platforms and the Growth of Digital Payment Ecosystems in China: What it means for other countries’ is the name of a case study issued by the Better Than Cash Alliance in April 2017.


The Better Than Cash Alliance is a UN-based global partnership of governments, companies and international organizations with over 50 members working on accelerating the transition from cash to digital payments.


The case study examines two big Chinese companies, Alipay and WeChat, which successfully implemented digital payment systems through e-commerce platforms and social networks.


“Nowadays, as more people get smartphones, what this case study wanted to show is that the social networks and e-commerce platforms are basically unlocking new economic opportunities for people and for businesses,“ Camilo Tellez, Knowledge and Research Manager for the Better than Cash Alliance, told Europa Newswire.


“The cost of smartphones is going down and the way that people are using smartphones through applications, through messaging platforms, through social media, becomes a new pathway for financial inclusion.“


The Chinese platform WeChat not only serves as a messaging tool, but can be used for a wide range of other services, such as paying bills, train tickets or even taxes.


“WeChat is very similar to WhatsApp. What is happening with WeChat is that since its launch, the number of people that are active on the platform has grown exponentially. Almost a billion people are on this platform. And what has happened is that beyond messaging this platform now has involved into a whole ecosystem of products and services,“ said Tellez.


The case study “signals a change on the way that people are making payments. Historically, we have had cash and then digital payments emerged, people started using first cards, debit cards, credit cards and increasingly payments through their mobile phones,“ said Tellez.


Digital payments can provide people in poor communities, and especially women, with new economic opportunities and thus help reduce poverty by enhancing financial inclusion and driving economic growth.


“Digital payments can provide a tool to onboard women into the formalized economy,“ said Tellez.


Through increased control and privacy, digital payments can help empower women when it comes to their independency and household decision making.


“Boosting access to digital payments can be particularly important for women because it can provide, for example, more control over family finances. It can increase personal security and improve economic opportunities,“ said Tellez.


While China is a very specific market and not all lessons are applicable to other markets, other countries can include some of the lessons learnt from the Chinese model to accelerate the transition from cash to digital payments, such as the significance of forming effective partnerships and building trust.


Informing customers responsibly is one of the challenges that digital payments providers face. Providers must ensure that they design and provide their services responsibly and inform their customers properly. Building trust is key when it comes to successfully promoting digital payments. Consumers need to understand what products they are buying, how their data is being used and who to contact in case of difficulties.


“While the rates of financial inclusion are increasing, there is still a long way to go,“ said Tellez. “All countries can benefit from digital payments.“


“In every country, there are specific commercial and regulatory concepts and there is no one single solution, it really depends on the countries’ context. … Overall, governments always want to reduce costs in their operations. They want to become more efficient in how they operate and also in the way how they engage with their citizens. Digitizing is the pathway towards that.“


“Digital payments help reduce costs in transactions, they help increase transparency, they help boost domestic resource mobilization, eliminate theft and loss, can help direct financial inclusion, can help power inclusive growth and empower people,“ said Tellez.

Source: EuropaNewswire

© EuropaNewsWire