Payment systems in India and China differ significantly in terms of technological development, penetration and policy environment. The following is a comparative analysis in a number of dimensions:
1. Dominant model
- sino: A high concentration ofMobile Payment Dual Oligopoly(Alipay + WeChat Pay accounted for more than 90% market share), QR code payment penetration over 80%.
- India: A diverse ecosystem of "public-private hybrids", with the government-led UPI (Unified Payments Interface) accounting for 75% of transactions, but private wallets (Paytm/PhonePe, etc.) remaining competitive.
2. infrastructure
- sino::
- 4G network coverage 98%, smartphone penetration 74%
- Central Bank's Digital Currency DCEP Pilot Moves Forward
- India::
- UPI system surpasses 300 million daily transactions (2023 data)
- Aadhaar Biometrics Reaches 1.3 Billion People
- RuPay Card Issuance Exceeds 600 Million Cards
3. regulatory framework
- sino::
From 2017 onwards, all payment institutions will be required to clear through the Internet Union.
Provisioning 100% centralised depository - India::
RBI mandates 30% cap on UPI transactions to be processed by third-party apps (for international players like Google Pay)
Provision for localised storage of data
4. Differences in user behaviour
| norm | sino | India |
|---|---|---|
| Number of non-cash transactions per capita | 150+/year | 22 times/year |
| Percentage of micropayments | <$50 accounted for 63% | <100 rupees (about $8) accounts for 47% |
| Proportion of rural users | 38% (microfinance) | 57% (UPI) |
5.Innovative directions
–sino:Face swipe payment (market share has reached 15%), cross-border collection (Alipay+ covers 100,000 overseas merchants)
–India:: Voice payments (AI voice assistant supports 12 dialects), offline digital rupee pilot
6. Challenging comparisons
|China||India|
|—|—|—|—|
Biggest Pain PointsMarket SaturationAntitrust RegulationBanks' Bad Debt Rates Impacting Credit DeliveryCash Dependency Remains at 15% (Remote Areas)| |Digital Divide (Only 47% Women Have Bank Accounts)Cross-Platform Interoperability Needs to be Enhanced| |Digital Divide (Only 47% Women Have Bank Accounts)
Future trends: both countries are exploring the integration of CBDC with existing systems, but India's open API architecture may be better suited for replication in developing countries, while China's full-scene ecosystem remains a model for business closure. Notably, UPI's interconnection with Singapore's PayNow in 2023 heralds a new path of globalised collaboration for payments in emerging markets.
7. Cross-border payments and international cooperation
-
sino::
- Alipay+: It has already covered more than 10 markets in Asia (Japan, Korea and Southeast Asia) and supports local wallet interconnections (e.g. Kakao Pay in Korea, Touch'n Go in Malaysia).
- Digital RMB Pilot: Hong Kong and Singapore to conduct cross-border payment tests and explore trade settlement scenarios.
- challenge: Strict individual cross-border payment limits ($50,000/year) due to exchange controls.
-
India::
- UPI Globalisation: It has already connected with PayNow in Singapore and UAESWITCH in the UAE, and plans to expand to European, American and Indian diaspora in 2024.
- RuPay International: Rollout in South Asian countries such as Nepal and Bhutan, where Visa/Mastercard alternative strategies are evident.
- challenge: The rupee exchange rate is volatile and internationalisation acceptance is still limited.
8. Comparative financial inclusion
| dimension (math.) | sino | India |
|---|---|---|
| Bank account penetration | 96% (Central Bank 2023 data) | 80% (PMJDY plans to reach 500 million new users) |
| Digitisation rate of micro and small merchants | Ultra 90% supports code-sweeping payment | Approximately 651 TP3T (significant urban-rural disparity) |
| Credit service coverage | Ant spend/borrow users exceed 500 million | Only 27% adults have official credit records |
–Key differencesChina relies on the sinking of commerce platforms (WeChat Pay's "small shop code" in rural areas), while India relies on government policy drivers (e.g., UPI Lite's KYC-free feature).
9.Technical Architecture Differences
–sino:: Centralised clearing
-Alipay/WeChat ecosystem, transactions completed within the closed loop
The Central Bank's digital currency (DCEP) operates on a "two-tier basis" (distribution by commercial banks).
–India:: Distributed design
UPI is based on IMPS real-time settlement system, which can be accessed by any bank APP.
Digital rupee experimenting with "direct mode" (central bank to individual)
–affect (usually adversely)India's open architecture is more scalable but more difficult to control, while China's system is more stable but more expensive to innovate.
10.Future Competitive Focus
1)CBDC Application Scenarios
-China:Focus on B2B and government subsidy distribution (Shenzhen Digital RMB Red Packet)
-India: testing payroll and cross-border remittances (reducing SWIFT dependency)
2)AI Enabled Directions
-Alipay's "Intelligent Risk Control" Reduces Fraud Rate to 0.005%
-Paytm launches AI customer service assistant 'Hinglish' (a mix of Hindi and English)
3)regulatory gaming
-CNYC may ease foreign ownership restrictions to attract international players
-RBI may ask tech companies to share UPI traffic data
11.Implications for other emerging markets
| Conditions for the application of the Chinese model | Conditions for the application of the Indian model | |
|---|---|---|
| Best Practice Cases | Vietnam (ZaloPay replicates WeChat ecosystem) | Brazil (Pix system drawing on UPI architecture) |
| Core premises | High smartphone penetration + strong regulation | Strong willingness to collaborate among banks + urgent need for financial inclusion |
Note: Some countries in Africa are mixing and matching - e.g. Egypt is simultaneously introducing QR code standards (GSMA in partnership with China) + emulating UPI interoperability
If there is a need to go deeper into an area (e.g. CBDC technical details or a country-specific benchmarking analysis), the discussion can be developed further.
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