China and India lead the world in the number of proximity mobile payment users, and that's primarily due to an explosion of newly minted middle-class consumers eschewing credit cards in favor of easier-to-use mobile options.
More than two-thirds of proximity mobile payment users reside in China and India. In fact, when excluding those countries, the percentage of smartphone users worldwide using payment apps falls from 36.0% to 16.6%*.
Across most markets, the mobile payment landscape is fragmented with a number of competing services, as evidenced in our recent report "Global Proximity Mobile Payment Users." Players like Apple, Google and Samsung have struggled to gain widespread acceptance from consumers and retailers in Western countries.
The success of proximity mobile payment adoption in China can be credited to the country’s mobile-first culture, as well as a booming middle class opening bank accounts at high rates. These newly banked individuals choose to open mobile payment accounts rather than signing up for traditional credit cards. These mobile services are the primary in-store payment alternative to cash and credit cards. In 2019, nearly half of China’s population is expected to use mobile payments.
While China is the largest market for these apps, India has the fastest growing user base, which will rise 26.4% in 2019. Consumers in India initially adopted Paytm Wallet after the government’s demonetization of the rupee in November 2016. Similar to China’s Alipay and WeChat Pay features, Paytm Wallet’s use of QR codes resulted in wide retailer support. Between 2016 and 2019, usage among smartphone users will nearly double from 16.5% to 32.9%. Smartphone adoption and the arrival of competitors like Google Pay (formerly known as Tez) that support QR codes will drive further growth over the next few years.