I recently attended an analyst roundtable event hosted by E-Business Journal and Yeepay, one of the top e-payment companies in China. The common theme that everyone spoke of at the event centered upon building a healthy market environment to develop e-payment in China.
The "market environment" in China, which includes digital security, bank networks, and merchant partnerships, still lags at least 5-10 years behind that of Western countries where credit cards and credit card-facilitated online payment has been a commonplace for many years now. These types of e-payment infrastructure have only been implemented in China since 2002 with the founding of China UnionPay (CUP), China’s only inter-bank fund transfer network. In China’s tier-one cities, CUP's bank and merchant network has grown quickly to include most high-end restaurants and shops, but for most shops in the city (and in most parts of the country, for that matter) cash is still the only form of payment available.
Public transportation networks are, however, one of the bright spots for e-payment supporters as smartcard-based payment systems are currently being used in over 80 cities around China (with an estimated 200-250 million users). Credit card companies in China have been less successful so far a total of 25-30 million credit cards issued, but this figure is more than doubling each of the last two years.
Without an established legacy e-payment network in China, certain payment companies are pushing mobile payment as an alternative to bank cards and online payment.
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