China cashing out as mobile payment soars

Beijing : Yang Qianqian holds out her smartphone to scan a barcode on the mobile of a vendor selling fresh fruit and vegetables at a bustling outdoor market in Beijing.

The dance student is part of an explosion in the use of mobile payment platforms in China as consumers increasingly take out phones instead of cash to pay for everything from a coffee to a language class or a gas bill.

"Even though I have cash on me it's not convenient to get it when I am carrying a lot of bags," said Yang, 25, clutching plastic bags filled with pears, potatoes and watermelon.

China was the first country in the world to use paper money but centuries later the soaring popularity of mobile payment has some analysts forecasting it could be the first to stop.

The gross merchandise value of third party mobile payment rose more than 200 percent to 38 trillion yuan (about $5.6 trillion) in 2016 from a year earlier, according to China-based iResearch.

The growth of the cash-free system has been supported by China's rapidly expanding e-commerce market as Chinese shoppers increasingly shun bricks and mortar stores. 

"I think it's really very possible that China becomes the first or one of the first cashless societies in the next decade," said Ben Cavender, a director at China Market Research Group.

Cavender estimates China's mobile payment market is already 40-50 times larger than the United States.