New analysis provides a glimpse of the future as countries like China pave the way for a whole new system of banking. China is seeing an “explosive growth of mobile payments. With a record $12.8 trillion in mobile payment transactions from January – October 2017, China far surpasses the U.S. at only $49.3 billion,” according to data.
Dana Nino, an executive vice president at Geoswift, a Hong Kong payments firm said, “banks need to be aware that there’s a different model spreading...it’s the platform that gets the direct data from purchases, not the bank.”
In China, as big tech companies like Alipay and WeChat Pay continue to transform consumers’ perceptions by redefining what it means to be a bank, financial institutions are “only seen as a place where you deposit money and link it to [these tech giants]. The trust is aligned more with the platform than the bank.” This is a worrisome scenario for banks because “they don’t own the customer relationship. They’re being disintermediated.”