RIP cash? Instant, online finance is here to stay

E-payments, of course, are only a small part of the fast-growing Internet finance sector, which also includes peer-to-peer lenders, the insurance, investment, consumer finance and equity-based crowdfunding sectors.

In the first half of this year, Internet lending hit 300.6 billion yuan, more than the total 252.8 billion yuan for the whole of 2014.

However, problems have also started emerging with this new generation of financial services, the growth of bad loans creating the worst headlines.

Last year almost one in every four P2P companies in Shenzhen, home to the largest number of Internet lenders, were found to be having growing incidents of debt defaults.

To better regulate the Internet financing industry and boost investor confidence, late last month the authorities rolled out a raft of policies and measures to support innovation and minimize risk to ensure the healthy development of the sector.

I had my first experience of Internet finance two years ago, when Alipay launched the country's first online money-market fund, Yu'ebao. It featured higher investment returns of around 5 percent, against savings deposits in traditional Chinese banks limited to an annual return of 0.35 percent, with the minimum initial investment volume as low as 1 yuan.

I started using Yu'ebao when the rate was 6.7 percent. I deposited 10,000 yuan two years ago, meaning I would earn 1.83 yuan daily, almost 20 times the daily yield if I put the same amount in a bank.

After attracting 100 million users with a total fund value of 600 billion yuan by July 2014, that number now stands at 49 million, and 250 billion yuan. Its current interest rate has lowered to 3.2 percent, half the yield when I first entered.

Swings and roundabouts, clearly, but the die has been cast.

With this sophisticated finance market already part of life in China, people are clearly willing to embrace more ambitious, more convenient and more sophisticated forms of investment and payment than ever before, than simply having a wallet full of money.

Contact the writer at liuweifeng@chinadaily.com.cn