(26 April 2017 – Asia) A new UN study reveals that Alipay and WeChat Pay enabled nearly US$3 trillion in Chinese digital payments in last year, a twentyfold increase in the past four years.
The data shows that digital payments, using existing platforms and networks, provide access to a wider range of digital financial services, expanding financial inclusion and economic opportunity throughout China and neighbouring countries.
“Social networks and e-commerce platforms are growing in every economy, whether large or small,” Ruth Goodwin-Groen, managing director of the U.N. Better Than Cash Alliance, said in a statement.
“In China, digital payments are thriving from these channels, bringing millions of people into the economy. This matters because we know that when people — especially women — gain access to financial services, they are able to save, build assets, weather financial shocks and have a better chance to improve their lives.”
Other findings include:
More people have opportunities to save and invest. Platforms such as Alibaba's Yu'e bao make investing money into diverse sets of financial products more accessible for low-income populations. These products allows them to invest the money left on digital accounts, leading incrementally to long-term savings. From 2013 to 2016, Yu'e bao has grown to manage US$117 billion and is now serving over 152 million customers.
Digital finance helps dramatically increase access to capital for small merchants. As of September 2016, a total of 740 billion yuan (A$143.6 billion) had been lent on the Alipay platform to more than 4.11 million small and micro enterprises and entrepreneurs.
Big data generated through these platforms helps to build credit-scoring history and boosts access to credit, particularly for low-income financially excluded populations. For example, Sesame Credit offers an alternative creditworthiness assessment by examining the credit history, financial behaviour, contractual capacity, identity and social networks of users.