The Best Payment Method in China: A Complete Guide

You’re standing at a checkout counter in a bustling Chinese market, and you realize something fascinating: there’s no wallet in sight. Instead, people wave their phones or scan QR codes with practiced ease. China has revolutionized how people pay, and you might be wondering: what’s the best payment method in China?

Let me take you through a surprising evolution, a transformation that was as fast as it was profound. Cash, once king, has almost disappeared from major urban areas. The shift is stunning. If you're visiting or moving to China, mastering the best payment methods will make your life so much easier. We’re not talking about just “getting by” here — this is about thriving in one of the world’s most digitized payment ecosystems.

Alipay and WeChat Pay: The Undefeated Giants

You’ve probably heard of Alipay and WeChat Pay, but what makes them so dominant? Think of these platforms as more than just payment apps. They’re superapps. Alipay (by Alibaba) and WeChat Pay (by Tencent) are ubiquitous, integrated into almost every corner of daily life. You can pay for a cab, split a restaurant bill, shop online, even settle your utilities—all with a few taps on your phone.

Alipay and WeChat Pay are available to foreign visitors now, too, which wasn’t always the case. Previously, these apps were closed ecosystems, accessible only with Chinese bank accounts. Now, thanks to collaborations with Visa, Mastercard, and international banking systems, even tourists can use these payment giants with ease.

Here’s where things get really interesting: they don’t just handle payments. They’ve built entire ecosystems where you can invest, get loans, or buy insurance. The simplicity and breadth of services they offer make these two platforms the best choice for almost anything. In 2023, Alipay held 54% of the third-party mobile payments market, while WeChat Pay had about 39%—together, they are nearly unchallenged.

QR Codes: The Magic Behind the Scenes

We’ve all seen QR codes, but in China, they’re on another level. Whether it's a roadside food stall or a high-end mall, the QR code is the magic link between you and your payment. Scanning QR codes via Alipay or WeChat Pay has become so ingrained in daily transactions that it’s hard to imagine a day without it.

There’s also an elegance in how this works. You don’t even need to interact much with the person at the other end. Just scan, confirm, and you’re done. The convenience is unmatched, and it’s no wonder that other countries are trying to replicate this success.

UnionPay: The Traditional Powerhouse with a Digital Twist

For those who still use cards, UnionPay is the name that dominates the market. Think of it as China’s answer to Visa or Mastercard, but with a domestic twist. With over 8 billion UnionPay cards issued globally, it’s a robust payment method that also supports online and offline transactions.

While UnionPay might seem like a legacy option compared to mobile wallets, it has embraced the digital era by offering UnionPay QuickPass, which allows contactless payments with compatible smartphones. However, it doesn’t have the same lifestyle integration as Alipay or WeChat Pay, so it's more of a backup for people who might not want to rely solely on mobile payments.

Credit Cards: Still Useful, but Less Essential

Foreigners might be more familiar with using Visa or Mastercard credit cards. These are accepted in major cities, especially at international chains and high-end stores. However, credit cards are far from the most common payment method. If you want to blend in with the locals and experience the most convenient transactions, you’ll want to use mobile payment methods.

That said, having a credit card on hand is always a good idea, especially for large purchases or hotel bookings where they might be preferred over mobile payments. But don’t expect to use them for daily expenses like groceries or public transport.

Bitcoin and Cryptocurrencies: Still in the Shadows

You might wonder, “Is there a future for cryptocurrencies in China?” Given China’s historic stance on crypto, the answer is complex. In 2021, China banned all cryptocurrency transactions and declared all crypto-related activities illegal. However, that doesn't mean interest in cryptocurrencies has vanished entirely. While you won’t be able to pay for coffee with Bitcoin in China anytime soon, some underground markets continue to operate, though it's risky and largely inaccessible to foreigners.

Foreign Cards in China: A Tough Barrier, But Easing

For years, travelers struggled with using foreign credit and debit cards in China. Major mobile payment systems weren’t open to non-residents, and international cards were limited in their usage. But things are changing. Alipay and WeChat Pay have opened up to tourists, allowing foreign cards to be linked to their mobile apps. This makes it much easier for visitors to make payments without having to set up a local bank account.

Here’s how it works: You download the Alipay or WeChat Pay app, select the option for foreign users, and link your Visa, Mastercard, or international debit card. You can now use these apps just like a local. The process is seamless, and it’s a game-changer for anyone traveling to China.

Cash: Not Dead, But Not Thriving

Surprisingly, despite the digital revolution, cash still has a place in China. It's no longer the go-to method for young people or in major cities, but in more rural areas, you might still find cash transactions. Some older generations also prefer the tactile assurance of paper money. If you’re traveling off the beaten path, it’s always good to have some cash on hand, but don’t expect to use it in most urban areas.

The Future of Payments: Digital Yuan and Beyond

Let’s not forget the digital yuan (e-CNY), China’s central bank digital currency (CBDC). Launched as a pilot program, the digital yuan is set to be the future of money in China. It offers many of the conveniences of mobile wallets, but with the backing of the central bank, making it both secure and reliable.

The adoption of e-CNY could transform China’s payment landscape even further. Imagine a future where cash is obsolete, and everyone uses a government-backed digital currency that integrates with every aspect of daily life. It’s coming faster than you think.

In the future, we could see even more innovation. From facial recognition payments to biometric security, China’s push for a cashless society is relentless. The world will be watching as the next generation of payments emerges in this global powerhouse.

So, what’s the best payment method in China? For most people, it’s hard to argue against Alipay and WeChat Pay. But keep an eye on the digital yuan—it might be the one to dominate in the years to come.