Recent mobile payment restrictions in China won't curb enthusiasm for QR codes
The other day I was watching CBS newscasters discussing the future of mobile payments in the US. They spoke about mobile payments as though they are something of the future, only briefly acknowledging the growth and importance of mobile payments in other countries, like China.
Since returning to the US to celebrate Christmas, I have used a credit card more times than I have in 4 months of being in China.
This comes at the same time as China's announcement of its plans to curb mobile purchasing. The recently announced restrictions will limit payment amounts with a static barcode (max RMB 500 or $76 USD), and also mandates a daily limit (max RMB1,000 or RMB 5,000) for individuals who haven't undergone full authentication procedures. Individuals will also no longer be able to make mobile payments in exchange for cash. (source)
The US, as a whole, has still made very little progress towards switching to mobile payment, and I always found it surprising how heavily New York City, in particular, still relies on cash. Many places, such as your corner bodega, will not take credit card below a certain amount due to transaction fees. In China, it is these same corner shops, wet markets, restaurants, and other small businesses that benefit most from being able to offer purchasers a QR code to scan. These small businesses with tight margins have seen huge positive impact from mobile payment. Savvy business owners are also able to get data insights on who their customers are and their purchasing habits. (source)
Because mobile payment is so ubiquitous in China, unlike in the US, you can confidently leave your apartment or go to a work time lunch with only your phone in hand. In the US, you can never rely on mobile payment as your single form of payment, but rather have to scope out locations first to ensure that they're equipped for mobile pay or take a back-up form of payment, thereby counteracting the convenience of using your phone. The Square card reader is the closest comparison point to a QR code available to small vendors in the US, however, this service still has transactions fees and other costs of use.
In addition to the convenience of in-person purchases, mobile payment is an important part of the boom in online shopping sales, and helps drive shopping events, such as Alibaba's Singles Day. Mobile payment means easy 1-click purchasing, and also simplifies the online shopping experience, as users don't have to re-input credit card info for each new purchase, or at each new vendor. Instead, vendors simply link back to the mobile payment platform, like using Facebook to log-in to an app.
The new limitations imposed on mobile payment is unlikely to curb China's enthusiasm for QR cpdes. Rather, it will provide greater security and regulation in the long run-- a beneficial measure given the frequency and seriousness of QR code scams in China.