Is cash an endangered species? China is no exception. On the contrary. It even stays one step ahead of the Western countries. If the latter still enjoy their credit/debit card payments, the Chinese have skipped this stage and gone straight to mobile payment.

All in all in just five years. Paying with a smartphone just by scanning a QR code, a two-dimensional barcode type, in a shop, restaurant or even in front of a vendor’s stall, has become one of the most common gestures one will see everyday. The amount of the transaction is immediately debited from the customer’s account to credit the merchant’s account. Easy, fast and convenient. With this completely dematerialized payment method, one can carry out all daily purchases, without a single yuan in one’s pocket. “I pay everything with my phone from taxi, groceries, gas, bills to my daughter’s tuition fees or to make transfers,” said Wang Xiaofeng, a 42-year-old Beijinger.

Her French husband, David, hesitated for a long time before taking the leap. “It was more complicated for foreigners to link their credit card to mobile payment applications. Neither was I used to buying online, nor did I feel the need. Then, I slowly needed it in my daily life. I started to use mobile payment just two years ago,” he recalled. Today, he does not regret this decision. “It’s convenient. There are plenty of special offers.”he added. “I have not been carrying any cash around for three weeks now.”

The monopoly of two Chinese giants

Like her fellow 650 million eWallet enthusiasts, Wang uses Alipay, WeChat Pay or Tenpay applications and, occasionally, the American competitor, Applepay. Alipay, which belongs to the e-commerce giant Alibaba and WeChat Pay, a payment solution completely integrated inside the social and messaging application of Tencent, share 170 million daily transactions, which represented $ 5.5 trillion in terms of mobile phone payment volume in China in 2016. Alipay and WeChat Pay together make up for 92% of the mobile payment market.

The two Chinese giants have been engaged in a merciless war for several years. Left somewhat behind by its competitor, WeChat produced a genuine masterstroke. Prior to Chinese New Year in 2014, WeChat deftly used a centuries-old tradition where family and loved ones are being handed over red envelopes (hongbao) filled with banknotes during this celebration. Chinese consumers were then able to send their New Year gifts via their cellphones. During the Chinese New Year 2016, WeChat has sent more than 8 billion virtual red envelopes – 10 envelopes per use on average – compared to 1 billion in 2015 and only 16 million in 2014.

Spreading across the United States and Europe

In addition to China, the two colossi also plan to expand their influence in the United States and Europe, especially among the Chinese tourists. The latter can already pay their purchases in France via their cell phones since November 2016. Thanks to some partnerships established by Alipay, including the software producer and payment terminals Ingenico or the banks BNP Paribas and Edel. France was not chosen just by chance. Chinese tourists (2.2 million in 2015 and 1.6 million in 2016) spend an average of 9 billion euros per year, half of what they spend in Europe, according to the French agency of tourism development Atout France.

Alipay and WeChat show the same ambition in the United States. In February 2017, WeChat Pay partnered with the American start-up Citcon to establish the payment solution in 200 locations, including the Caesars Palace, Las Vegas. In May, Alipay formalized its partnership with First Data Corp, a renowned payment processor in New York. Alipay will be used in 500,000 stores throughout the United States and eventually in 4 millionstores.

Despite some mistrust in the country, the future of mobile payment remains promising, “I’m scared of my bank account getting hacked. There are scams,” Wang Xiaofeng admitted. The Chinese disaffection towards their smartphones does not seem to have started yet, even if Alipay and WeChat Pay are starting to charge users for their services, while limiting the amount of transfers allowed (130 euros for WeChat and 2,700 euros for Alipay) beyond which users will have to pay a commission. Finally, nobody knows yet if WeChat will emerge victorious in this digital war, knowing the fact that the group announced, in September, its willingness to disclose and share users’ personal data with the Chinese government.