Alipay and WeChat Pay enabled US$2.9 trillion digital payments in 2016. This represents a 20-fold increase in the past four years, according to a recent report by UN-based Better Than Cash Alliance.

“Social networks and e-commerce platforms are growing in every economy, whether large or small,” says Ruth Goodwin-Groen, managing director at the Better Than Cash Alliance.

In China, mobile payments are taking a greater share of the payments market as cash payments continue to steadily decline. The percentage of cash payments is forecast to halve in the decade from 2010, from 61%, to 30% in 2020. The percentage of cash payments in 2015 was 40%, with cards (44%), internet payments (8%), and mobile payments (8%) accounting for the rest. Mobile payments are predicted to be about 12% of the market in 2020, with internet 16%, and cards 41%.

“In China digital payments are thriving from these channels, bringing millions of people into the economy. This matters because we know that when people – especially women – gain access to financial services, they are able to save, build assets, weather financial shocks, and have a better chance to improve their lives,” adds Goodwin-Groen.

The UN report highlights several other key findings:
• New financial services have proven highly popular, delivering benefits to larger numbers of people. For instance, Alibaba’s Yu’e bao platform allows lower income populations to invest ‘left over’ money on their digital wallets. The assets under management on Yu’e bao’s platform have now grown to more than 810 billion yuan (US$117 billion) making it one of the largest money market funds in the world.
• Digital finance has dramatically increased economic activity and e-commerce, as well as lending among small businesses. Ant Financial had lent a total of 740 billion yuan (US$107.3 billion) to over 4.11 small businesses as of September 2016.

“As this ground-breaking UN report highlights, this revolution is only just beginning. We see tremendous potential to bring many more people into the financial system, in China and markets around the world,” says Eric Jing, CEO of Ant Financial Services Group, which operates Alipay.