In just 30 years, the development of China's Internet has caught the world's attention. The Internet seems to be connecting everything. But today, with the wings of the Internet, fintech seems to be doing the magic again.
On February 25, The Economist reported that China is the world's largest fintech (financial technology) by any measure. Among them, mobile payment, online lending and investment have become the three main forces of fintech.
Mobile payment goes deep into life
Mobile payment, represented by Alipay, has become an essential tool in People's Daily life in just five years. Using Alipay to shop and pay offline has become a common phenomenon. Ant Financial, which owns Alipay, is valued at $60 billion, on a par with Switzerland's UBS, and Chinese mobile payments already account for nearly half of the global market.
The development of smart phones has greatly promoted the boom of mobile payments. It is now a reality for everyone to own a smartphone, and the age of people who own smartphones is decreasing further, and it is no longer uncommon for primary school students as young as 10 to own a smartphone. The development of smart phones and 4G technology has made mobile payments possible and developed rapidly. Mobile payment operators have made mobile transactions a reality through technology that allows offline merchants to collect money with just a QR code and consumers to complete the transaction by scanning the code. Some of the larger merchants also have a code-scanning function, where consumers can show their QR code and merchants can charge by entering the amount of money and scanning the consumer's payment code.
Online lending is growing rapidly
In China, the development of online lending is short-lived but growing fast. In a broad sense, in addition to P2P, consumer finance is also an aspect of online lending. The trend is catching on as users pay for loans by writing ious or paying in installments on the platform. It was reported that Ant Huabei had more than 80 million users in November 2016. Today, that number easily passes 100 million.
When the P2P companies launched in 2006, there was little interest in online lending and only a few years later. In 2011, P2P development began to emerge. The year 2012 ushered in explosive growth. In just three years, there have been more than 3,000 P2P lending companies. The high growth is especially evident in the online lending industry. Take the online lending platform Cloud Qianbagao for example. At the end of 2014, the number of its users was only 12,000, which soared to 338,000 in 2015, and the total transaction volume also increased from 230 million to 3.61 billion.
Although relevant policies were introduced in 2016 to regulate P2P online lending, its growth rate still leaves other industries lagging behind. The industry is now approaching $4 trillion in transaction volume, which fully demonstrates its growth.
Young people are keen on investing online
The development of fintech is also reflected in investment. The development of various Internet financial investment platforms makes more people start to contact investment. In terms of investment and financial education, we obviously have shortcomings. But the Internet makes up for it. At present, many online education platforms and broadcast rooms have opened investment and financial education, which has positive significance for investors' risk management and financial education.
While online investment is robbing the banking market, it is also forcing banks to reform. Online investment, though, is small, accounting for less than 1% of the banking industry. However, its rapid development speed and young and convenient brand image are deeply loved by the young generation. Today, many young people have much less access to banks than pay cards and credit cards.
The development of fintech has unique advantages in China, where the cost of education for young consumers is quite low. At present, many traditional industries such as Gome Electrical Appliances and Evergrande Real Estate have set foot in the field of fintech. It can be expected that a trillion-scale market is heading for a bright future.
