Case Study 5: Cashless Convenience in China—A Survey of Its Development and a Case Study of the Political Economics Behind the Mechanism

Abstract

Starting with China’s coastal cities with high levels of smartphone connectivity, the cashless revolution gradually swept the country. Its attraction for Chinese consumers is very simple. With a swipe of a code, Chinese consumer can now make payments for just about anything. The scanning process is based mainly on a Quick Response (QR) Code designed by Japan’s Denso Corp in the 1990s for storing more data than the traditional bar code. QR code was adapted by China’s cashless mobile payment systems for electronic transactions. Convenience is also enhanced by the fact that consumers can now make payments on the move. They can pay for acquisitions in advance anywhere in China or clear their loan payments on the move.

This case study is derived from a limited circulation background brief working paper for National University of Singapore (NUS EAI): Lim, Tai Wei, “Cashless Convenience in China: Development and Political Economics” dated 16 August 2018 in EAI Background Brief No. 1376 (Singapore: National University of Singapore East Asian Institute NUS EAI), 2018.