• by Erik Sass , Staff Writer @eriksass1, April 26, 2017

While social media got its start in the United States, other countries are leading the way when it comes to inventing and adopting some of the nifty accessory functions that social media enables, such as peer-to-peer and business-to-consumer payments (and vice versa) on social platforms.

A survey by the United Nations found that digital payments via social media across all categories reached an astonishing $2.9 trillion in 2016 – a twentyfold increase compared to just four years before. The study touted social payments, typically facilitated by ubiquitous smartphones or other mobile devices, as a major step forward in expanding access to financial services among marginalized groups, especially women and the rural poor. 

Even more remarkable, the lion’s share of these payments were handled by two dominant services, Alibaba’s Alipay and WeChat Pay. In addition to enabling digital payments between individuals as well as a range of businesses and government organizations, the UN noted that Alibaba’s tools allows users to invest their money in various financial products and build-up long-term savings.

In fact, one branch of Alibaba, Yue bao, is managing investments and savings funds totaling $117 billion for 152 million customers. Meanwhile, fintech is also helping arrange funding for a whole generation of small businesses in China, taking advantage of crowdfunding and new methods for analyzing creditworthiness: over the last few years Alipay alone has enabled loans of $107.3 billion to small enterprises.

China may be ahead of the U.S. in consumer adoption of mobile and social media payments, but Americans are catching up fast. According to one recent forecast, peer-to-peer payments will grow from $59.42 billion in 2016 to $92.1 billion in in 2017. In proportional terms, the number of Americans using P2P payment services is expected to jump from 45.8 million in 2016, or about one quarter of U.S. smartphone owners, to 75.7 million or 37.2% in 2018.