So dominant have China’s home-grown digital payment systems become that many shops in Shanghai and Beijing now accept only WeChat or Alipay apps that scan a code on a customer’s smartphone.
The process is quick,efficient and easy for locals. It saves the need for a wallet and allows payments to be made to shops and friends in real time. It is also weening shoppers off international payment systems and sanction-proofing China’s economy.
Beijing watched on asUS sanctions crippled Russia’s economy by freezing access to bank accounts and international transfer systems in retaliation for the invasion of Ukraine. It won’t let the same thing happen to China in the event of a conflict over Taiwan.
“You have to believe that they’re thinking along those lines if they were considering doing something in the future,” US Secretary of Defence Lloyd Austin said last year.
The transformation is already happening. Not just through WeChat and Alipay,but through the government’s own digital yuan payment system which aims to reduce the public’s dependence on the two Chinese tech giants and consolidate the government’s power over the financial system.