Techno Blender
Digitally Yours.

Why China is barring loan defaulters from mobile payment apps

0 28


China has barred millions of customers from mobile payment apps as defaults made by borrowers reach a record high. According to a report by the Financial Times, 8.5 million Chinese users (mostly between 18 and 59) have been blacklisted from digital payment apps for missing payments on mortgages and business loans. The number of defaulters has gone up from 5.7 million in early 2020 when the country went through an economic downturn caused by the Covid-19 pandemic.

China’s laws against defaulters
As per the report, Chinese law forbids blacklisted defaulters from taking part in a number of economic activities. This includes buying airline tickets and making payments via mobile apps like WeChat Pay and Alipay. A user in China is blacklisted after a borrower misses a subsequent payment and is sued by their creditors.

In a statement, chief economist at Hang Seng Bank China, Dan Wang said: “The runaway increase in defaulters is a product of not only cyclical but also structural problems. The situation may get worse before it gets better.”

In July, Alipay and WeChat Pay dominated 91% of China’s digital payment space. Also, cashless payments in the country add up to $434 trillion worth of transactions each year.

Rise of contactless payments in China
A Pymnts report claimed that the ongoing “rise of contactless payments may be among the most notable payments trends of the year, (in China) and it could pave the way for innovations that will shape commerce in the years ahead.”

Read Also

Microsoft Xbox Store now supports UPI payments
How to make Credit Card payments through UPI on Paytm

At that time, PSCU Chief Growth Officer Brian Scott said that the groundwork for contactless payments was laid a few years ago. Credit unions and other financial institutions (FIs) started to create and issue contactless cards at scale and educate the public on how to use them. The pandemic was crucial in pushing people to explore payment methods that didn’t involve passing their cards back and forth amid concerns about public health.

Scott said: “Contactless payments have been incredibly impactful. The consumers using contactless consistently are using cards more often as their primary payment device.”

Meanwhile, retailers who cater to budget-conscious Chinese consumers reported a boom in sales amid the country’s downturn. For example, online retailer Pinduoduo, which offers groceries, apparel, electronics and other items at lower prices than many other retailers, reported a 66% increase in revenue as its platform began attracting both rural and urban customers.

FacebookTwitterLinkedin



end of article


Why China is barring loan defaulters from mobile payment apps

China has barred millions of customers from mobile payment apps as defaults made by borrowers reach a record high. According to a report by the Financial Times, 8.5 million Chinese users (mostly between 18 and 59) have been blacklisted from digital payment apps for missing payments on mortgages and business loans. The number of defaulters has gone up from 5.7 million in early 2020 when the country went through an economic downturn caused by the Covid-19 pandemic.

China’s laws against defaulters
As per the report, Chinese law forbids blacklisted defaulters from taking part in a number of economic activities. This includes buying airline tickets and making payments via mobile apps like WeChat Pay and Alipay. A user in China is blacklisted after a borrower misses a subsequent payment and is sued by their creditors.

In a statement, chief economist at Hang Seng Bank China, Dan Wang said: “The runaway increase in defaulters is a product of not only cyclical but also structural problems. The situation may get worse before it gets better.”

In July, Alipay and WeChat Pay dominated 91% of China’s digital payment space. Also, cashless payments in the country add up to $434 trillion worth of transactions each year.

Rise of contactless payments in China
A Pymnts report claimed that the ongoing “rise of contactless payments may be among the most notable payments trends of the year, (in China) and it could pave the way for innovations that will shape commerce in the years ahead.”

Read Also

Microsoft Xbox Store now supports UPI payments
How to make Credit Card payments through UPI on Paytm

At that time, PSCU Chief Growth Officer Brian Scott said that the groundwork for contactless payments was laid a few years ago. Credit unions and other financial institutions (FIs) started to create and issue contactless cards at scale and educate the public on how to use them. The pandemic was crucial in pushing people to explore payment methods that didn’t involve passing their cards back and forth amid concerns about public health.

Scott said: “Contactless payments have been incredibly impactful. The consumers using contactless consistently are using cards more often as their primary payment device.”

Meanwhile, retailers who cater to budget-conscious Chinese consumers reported a boom in sales amid the country’s downturn. For example, online retailer Pinduoduo, which offers groceries, apparel, electronics and other items at lower prices than many other retailers, reported a 66% increase in revenue as its platform began attracting both rural and urban customers.

FacebookTwitterLinkedin



end of article

FOLLOW US ON GOOGLE NEWS

Read original article here

Denial of responsibility! Techno Blender is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – [email protected]. The content will be deleted within 24 hours.

Leave a comment