Cashless Week in China runs from August 1st to August 8th. During this time, Alipay will encourage Chinese citizens to participate in “cashless city construction”.
This event is a promotion from the Alibaba group, and is part of the end goal of creating a completely cash free nation within 5 years. Already, 5 cities have announced their cooperation with the “cashless city plan” in the last month. These cities were Wuhan, Fuzhou, Guiyan, Tianjin and Hangzhou. They can be classes as cashless with 90% of public services, transport, retailers and local business accept digital payments.
Alipay already has 520 million active users and a 54% share of the 3rd party online payments market in China. 40 million Alipay users have already signed up for Cashless Week in China, making it clear that China is ready to give up cash. Mobile payments in China are already 50x larger than in the US. In America, chip & pin is only a recent development, and citizens are only just starting the transition to contactless cards.
In addition to Cashless Week, WeChat have named August 8th their “Cashless Day” for the third year running.
During the month of August, both apps will offer incentives to customers for settling deals and shopping with their apps. Alipay rewards can be up to 4888 CNY per transaction of at least 2 CNY, and these rewards add up to be used in the future. If the Alipay app is used mere than once a day throughout the campaign, the user is entered in to a lottery to win a share of 18,888g of gold.
Cashless Week isn’t just a sign up promotion that aims to bring new users and merchants on board though. It has been put in place to boost the cycle of digital wallet use, support the movement of money between accounts and encourage the purchase of high end goods & services. It should also strengthen the partnership between retailers and their customers.
The value of mobile payments in China reached $5.5 trillion in 2016, and as many os 63% of shoppers prefer to buy on their smartphones rather than in store. Crossborder ecommerce continues to grow by 50% each year, and are now worth about $40 billion according to McKinsey & Co.