In a recent Twitter Spaces discussion with Coinbase CEO Brian Armstrong and listeners, former U.S. Comptroller of the Currency, Joseph Otting, expressed his concerns about China’s rise in the mobile payments industry. Otting highlighted that the U.S. has been a global leader in payments, which has allowed the government to impose sanctions on countries such as Iran and North Korea. He argued that innovation under clear rules has reinforced U.S. national security controls. However, he noted that China is catching up on dominance in mobile payments, both in sophistication and scale.
Otting’s comments come at a time when China’s mobile payments market is growing rapidly. According to a report by eMarketer, China is expected to have 956.1 million mobile payment users this year, up from 849.6 million in 2020. The report also predicts that China’s mobile payment transaction value will reach $29.93 trillion in 2021, up from $25.88 trillion in 2020. This growth is largely due to the widespread adoption of mobile payments in China, which has been driven by the popularity of digital wallets like Alipay and WeChat Pay.
China’s dominance in mobile payments has raised concerns among some policymakers in the U.S. In a recent hearing of the Senate Banking Committee, lawmakers discussed the potential risks posed by China’s digital currency, the digital yuan. Some lawmakers expressed concerns that the digital yuan could be used to evade U.S. sanctions and undermine the dominance of the U.S. dollar in global trade.
Despite these concerns, it is unclear what steps the U.S. government will take to address China’s growing dominance in mobile payments. Some experts have suggested that the U.S. could invest in its own mobile payments infrastructure to compete with China. Others have argued that the U.S. should focus on strengthening its regulatory framework to ensure that innovation can continue to thrive while also protecting national security interests.
One thing is clear: China’s rise in the mobile payments industry is a trend that is unlikely to slow down anytime soon. As more and more consumers around the world adopt mobile payments, China’s digital payment giants are likely to continue expanding their reach and influence. The U.S. and other countries will need to find ways to adapt to this new reality if they want to remain competitive in the global payments landscape.