WILL THE CHINESE DITCH QR CODE PAYMENTS?

About 10 years ago, we were amazed how China, in no time, changed into a cashless society through apps like WeChat and Alipay. Even now, I see LinkedIn posts of people going to China for the first time and sharing it as an amazing innovation. But we often forget that it was simply the best option for the Chinese, many of whom did not have bank cards. At home, we all have bank cards with contactless payment nowadays, or pay through NFC with our phone. How many of us still carry around lots of cash?

So, besides the payment method, it’s not all that different. China went for a different solution. One of the reasons was that NFC didn’t take off at the time, and the software solution (scanning QR codes) won over hardware. The fact that merchants did not need hardware and everybody had a phone to scan their printed QR codes with also resulted in very fast adoption.

But QR codes also had their limitations, especially for the elderly, and they could get damaged or be replaced by criminals. Ant Group, the Alibaba spin-off and company behind Alipay, now wants to change that with Alipay Touch (支付宝碰一下, Zhifubao Peng Yixia).

Touch further simplifies the process: you still pay with your phone, but no longer need to open the app. As with Western NFC-based payment tools, you hold your phone close to the POS device.

Alipay started the Touch project in July 2023, and by 2024, the team had grown to over 200 people. Ant worked with phone manufacturers to optimise the hardware of the phone. Chinese phones have started adding the Touch functionality. 7 out of 10 sold phones now support NFC.

Alipay decided to roll out the product slowly and focus on user acceptance. In June 2024, Alipay conducted a Touch stress test in Shanghai’s Joy City Mall, utilising 200 machines and 10,000 users. User reception was positive. After the test, belief in the system among Alipay staff increased from 20%-30% to 70%.

In July 2024 the roll-out to key accounts that would use 4K-10K machines started and by April 2025, 10 million merchants were connected. Alipay mostly subsidises the equipment.

Alipay is now actively looking for use cases beyond payment, including community access control and ticket checking in scenic spots. Ant’s Hello Bike can also be used with Touch. Because the technical setup uses the phone as the reader, new POS systems are often not required in such use cases.

Touch now has 100 million users and a high growth rate.

Source: Latepost

On my last trip to China, I began noticing POS devices in some chain stores (see picture) and observed more people using them. QR-codes, facial recognition payment, palm scanning, NFC Touch … what do you think will be the primary payment method in China in 5 years?

-Ed