China’s Digital Transactions Adoption

China’s digital transactions adoption serves as a framework model for countries like Pakistan to enhance digital payment ecosystem.

China is increasingly transforming into a cashless society as digital transactions have become common throughout the country.

The data by Statista projects the global digital payments market will hit $11.55 trillion in 2024, with China leading at $3.74 trillion.

This transitioning holds valuable lessons for countries like Pakistan, as the digital payment ecosystem continues to strengthen in China. The trend of digital transactions extend beyond urban areas, into the rural regions, helping the small businesses and residents to adapt to the digital technology there.

Monis Rehman, CEO and Co-Founder of Dukan highlights that China’s experience in adoption of digital transactions offers valuable insights to Pakistan. He further underscored that Pakistan can adapt to China’s diverse strategies and tailor them according to its own standards.

Rahman, while exploring the streets of Guangzhou noted that China did not use a single, unified QR system that is similar to UPI, RAAST or PIX. Instead multiple banks employ their own distinct QR codes for transactions.

He observed that most shops display two QR codes: green ones for WeChat and blue ones for Alipay, because of incentives encouraging this practice. Similar to Pakistan’s multiple POS machines, Chinese stores commonly use multiple QR codes for transactions.

Larger stores use hand-held scanners to read dynamic QR codes displayed by customers in their payment apps, enhancing security with codes that change with each transaction.

“However, implementing this system requires investment in costly scanner hardware and complex POS software, which may not be feasible for our 6.5 million small retail merchants. This system speeds up transactions for customers, as they only need to show their QR code without typing on keyboards,” he noted.

Rahman noted that around 25% of stores use QR sound boxes, though dynamic QR sound boxes are uncommon due to the complexity of POS software. Instead, Bluetooth-enabled payment apps provide a soundbox experience using static QR codes.

The widespread use of mobile for transactions in China can prove to be a challenge for those who depend on cash or cards for payment. To improve the experience of foreigners, the Chinese government has adopted measures to offer hassle free payment options. The banks in China are expanding the acceptance of overseas bank cards and facilitating cash transactions.

Major payment apps such as Alipay and WeChat Pay now enable foreign users to link international credit cards, simplifying transactions. These measures aim to offer a seamless payment experience for visitors and could serve as a model for other countries.

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