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CommentJuly 2 2019

Mixed signals stymie China's fintech charge

China's fintech expansion has made global headlines – but progress is not consistent across the country. 
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China’s adoption of mobile technology is one of the world's most widely reported and scrutinised fintech stories. In a country that in the early 2000s still largely depended on cash for transactions, the arrival of mobile QR code payments ushered in a new era of commerce.

This success rides on the back of China’s huge population. In 2018, the country boasted 802 million internet users, and 98% accessed the internet through their mobile  phones. 

However, while these numbers are substantial, they represent just 57.7% of China's overall population. And as the major cities start the push towards 5G network coverage, rural communities are still waiting for a consistent 3G connection.

As everything from buying street vendor snacks to paying for public transport moves to mobile, the risk lies in the fallibility of the technology. Loss, an accident or even the failure of the device’s software could leave users high and dry; for example, without access to their subway tickets or a way to order a taxi, or even having the means to call someone in the case of an emergency.

With this in mind, mobile payment pioneers are now exploring a world that does not rely on mobile phones. These developments are instead consumer based; for example, recent advancements include facial recognition software that has 99.9% accuracy to make payments in the supermarket. On a larger scale, the development of 'smart cities' has seen data being used to forecast anything from traffic flows to energy demand.

For China’s rural communities that are still waiting for better internet coverage, however, such developments are unimaginable. A simple and consistent mobile phone signal would have a similarly transformative impact upon their lives.

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