China had 1.2 billion unique mobile subscribers by the end of last year, making it the largest mobile market in the world. This widespread mobile ecosystem has resulted in a steep growth in mobile payments over the past five years, with transactions touching 277.4 trillion yuan ($41.51 trillion) in 2018, which is almost 28 times more than what it was five years ago, according to a report by the country’s central bank, People’s Bank of China (PBOC).

More than 60 billion mobile payment transactions were conducted in 2018, while the figure was 1.67 billion in 2013, says the report.

The Dominators

Going by the PBOC findings, more than 220 billion deals in non-cash payments were conducted last year, which involved 3,768.67 trillion yuan, a rise of 36.94 per cent and 0.23 per cent year-on-year, respectively.

Non-banking payment institutions, or third-party online payment service providers, on the other hand, had over 530 billion deals, surging 85.05 per cent, and the transaction volume was 208.07 trillion yuan, up 45.23 per cent from the previous year, it adds. Mobile payment platforms Alipay and WeChat Pay occupy over 90 per cent of market share.

By the end of 2018, 424 commercial banks and 115 payment institutions were connected to a unified clearing platform set up by the Payment and Clearing Association of China, PBOC said. The platform serves as the sole intermediary for the clearing of nonbank online transactions.

The Growing Economy

With more than 80 per cent of the country’s population having a mobile subscription, the ecosystem has also added to the economy of China, which is entering the 5G era.

According to a new report by GSMA, China’s mobile ecosystem added RMB5.2 trillion ($750 billion) in value to the country’s economy last year, equivalent to 5.5 per cent of China’s GDP in 2018, according to a new GSMA report. What’s more, China’s mobile ecosystem, directly and indirectly, supported 8.5 million jobs in 2018 and made a tax contribution to the public finances of government of RMB583 billion ($84 billion).

“… China’s mobile industry has been a key driver of economic growth, inclusion and modernization – creating a new generation of digital consumers and transforming industry and society,” says Mats Granryd, director general of the GSMA, in the report titled “The Mobile Economy China 2019″. “After spending billions over the last decade deploying 4G networks to all corners of the country, Chinese mobile operators are now set to invest a further RMB401 billion ($58 billion) over the next two years to prepare for and begin 5G rollouts, laying the groundwork for China to become one of the world’s leading 5G markets.”

China is set to become one of the world’s leading 5G markets with 460 million 5G connections forecast by 2025, which would account for 28 per cent of China’s total connections by this point. The RMB5.2 trillion ($750 billion) economic contribution by China’s mobile ecosystem in 2018 is believed to grow to RMB6 trillion ($870 billion) by 2023.

Along with Japan, South Korea, the US and certain Gulf states, China is expected to be a frontrunner in terms of commercializing mobile 5G and leading coverage rollout.