Last weekend, Chinese New Year was celebrated by millions of people. Traditionally, they will exchange cash -filled red envelopes called hongbao in Mandarin.
However, this year, a record high number of these red envelopes were digital and was sent over social messaging services. Over the six-day Chinese Spring Festival period last year, 516 million people sent and received 32 billion digital red envelopes. This was 10 times more than 2015 in the same period.
This year there was a forecast for up to 100 billion digital envelopes to be sent and received by Chinese well-wishers around the world.
It’s a clear indication on how the world of money is changing as we can easily send money to each other as easily as sending an email or text. Global research firm Ovum predict the value of mobile payments to be £214bn worldwide in 2019.
So why is sending money this way proving so popular? Paying somebody by text or an app has never been so quick and easy without the hassle to go out your way to a cash machine and handing over the money in person.
Whether you’re splitting a dinner bill between friends, contributing to share household costs, sending a gift or lending someone a few pounds, payment apps offer convenience within an encrypted, secure environment.
The Chinese social media platforms operated by the tech giants Alibaba, Tencent and Baidu have spearheaded the social payments explosion in Asia.
Facebook Messenger, who claim to have more than one billion users globally, have been offering in app payments since 2015 in the US. They are planning to expand the service throughout Europe after acquiring the relevant e-money banking licenses.
More and more people are using online banking because of how easy it’s become to transfer money. This free method allows people to send money to each other regardless of where they are in the world.
But in the Chinese Year of the Rooster, it remains to be seen whether a digital red envelope will bring as much luck and good fortune as the traditional paper one.