The total value of mobile payment transactions in China is expected to grow at an average annual growth rate of 142% over the next three years to reach 13,776.5 trillion yuan ($2,011.17 trillion) by 2020, according to Research and Markets.
According to a new report by the research firm, mobile banking accounted for 83.1% of the value of mobile payment transactions in 2015, but this is expected to decline slightly to 80.4% in 2020.
Among the banks, China Construction Bank had a 23.1% market share, followed by Industrial and Commercial Bank of China (20.0%) and Agricultural Bank of China (13.9%).
Faced with fresh challenges from payment service providers, the banks are expected to strengthen competitiveness by introducing differentiated services and products, such as jointly-issued cards or support for large payments.
Third-party mobile payment transaction values have been estimated at 21.96 trillion in 2015, with the market rapidly growing. Alibaba's Alipay and Tencent's Tenpay have captured 90% of the market.
Market competition further intensified in 2016 as handset vendors and traditional enterprises stepped up their presence in the payment market.
Research and Markets expects 2D QR code payment technology to continue to lead the market. More secure and advanced technologies such as near field communication (NFC), hosted card emulation (HCE), token authorization and biometric authentication will meanwhile mature more gradually.