By Junjie Yang
In China, WeChat Pay and Alipay have completely transformed the way people pay for things. These two platforms, owned by Tencent and Alibaba, dominate the digital payments market and have become an essential part of daily life. As reported by Brookings, WeChat Pay is seamlessly built into WeChat, China’s most popular messaging app, allowing users to send money, pay bills, and shop without ever leaving the app. Similarly, Alipay started as a way to pay for purchases on Alibaba’s e-commerce sites like Taobao, but it has grown into a comprehensive financial platform offering services like savings accounts, insurance, and loans.
What really sets these platforms apart is how they make life easier for both consumers and businesses. As explained by fabrick, a financial technology professional development company, Alipay is essential for online shopping, especially on Taobao, where it’s practically the only payment method, making it indispensable for millions of users. Meanwhile, WeChat Pay is widely used not just for online payments but also for in-store transactions, offering a level of convenience that’s hard to beat. Both platforms are so deeply integrated into everyday life that many Chinese people simply can’t imagine living without them.
Another big reason these platforms are so successful is that they save merchants money. According to the Focusfinance, traditional credit card systems charge merchants high fees—usually between 2-3% for each transaction. In contrast, WeChat Pay and Alipay charge much lower fees or even refund fees for small merchants if their monthly transaction volume is below a certain threshold. With just a smartphone and a QR code, any vendor can start accepting payments, reducing operational costs significantly.
The digital payment systems in China and the US are very different, not just in technology but also in how people and businesses use them. Also explained in fabrick, iIn China, mobile payments dominate everyday transactions, with 93% of people using Alipay and 86% using WeChat Pay in the past year. These platforms are built into popular apps and use QR codes for almost all transactions, making them accessible for everything from street vendors to high-end stores.
In the US, while apps like PayPal, Venmo, and Apple Pay are growing, the majority of payments still rely on credit and debit cards, which are tied to older banking systems. The US primarily uses NFC (Near Field Communication) for mobile payments, which requires more expensive infrastructure and is less widely adopted than QR codes in China. NFC allows devices like smartphones or smartwatches to make contactless payments, simply by bringing the device close to a compatible payment terminal. Payment systems like Apple Pay rely on NFC technology to facilitate these quick, secure transactions. However, NFC adoption has been slow, particularly among small merchants, due to the high costs of upgrading terminals and hardware.
Another big difference is the role of banks. As documented in CGAP, a global partnership of financial development organizations, in the US, banks are at the center of payment systems, earning significant revenue from transaction fees and credit card interest. In China, WeChat Pay and Alipay have largely bypassed banks by connecting directly to consumers and merchants through their platforms. This disintermediation has made payments faster and cheaper for users but has also raised privacy concerns because these tech companies collect large amounts of data.
Finally, adoption rates tell a clear story. In China, over 73% of the population uses mobile payments regularly, with young people aged 18-34 leading the way. In the US, cash and cards still play a bigger role, especially for older generations who may not trust mobile wallets.While mobile payment options are growing among younger users, the US system remains anchored to its traditional banking infrastructure, making full adoption slower and more fragmented compared to China’s digital payment revolution.
