Paying a street vendor, booking a doctor, filing taxes, unlocking a bike — in China, 1.4 billion people do all of this inside a single app. Europe is still debating the legal framework for a digital currency with no launch date and no comparable platform behind it. The gap between the two approaches is not just technological. It is a question of strategy, and of timing.
Alipay started in 2004 as a payment button for Alibaba’s online marketplace. It solved a simple problem: how do strangers trust each other enough to exchange money online? The answer was escrow — Alipay held the funds until the buyer confirmed delivery. It worked. Within a few years, hundreds of millions of Chinese users had an account.
Then came savings, loans, insurance, healthcare bookings, and government services. Today, 80 million businesses run through it. What began as a checkout tool became infrastructure.
The QR code bet
In the early 2010s, while Western markets invested in card terminals and NFC technology, Alipay made a different bet: QR codes. They were cheap, required no new infrastructure, and worked on basic smartphones. A street vendor could print a code and start accepting digital payments instantly. Within a few years, QR codes became the default payment method across China.
This decision cut banks and international card networks out of the process, routing payments through platforms instead. From there, the expansion was gradual and relentless. By integrating public services, from utility bills to taxes, city by city, even when the business case was weak, the app became a digital infrastructure layer.
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Belgium is an exception. Its Payconiq system, now rebranded as Bancontact Pay, lets consumers scan a merchant’s QR code directly from their banking app. By 2025, nearly one in two Belgians used QR-code payments, with volumes growing eightfold since 2019.
But across Europe, most markets chose to prioritise technological sophistication over usability and dismissed QR codes as inelegant. They proved transformative precisely because they were simple. Beyond simplicity, QR-based systems can also bypass US-dominated card networks, an ambition gaining momentum in Europe as calls for greater payment sovereignty grow louder.
The limits of replication
Alipay’s strength is not any single feature, but the way everything connects. Payments, financial services, and public administration reinforce each other, creating daily habits. Europe’s landscape, by contrast, remains fragmented across banks, fintechs, and national systems. A more unified layer, whether built around a digital euro or existing infrastructures, could reduce this fragmentation, particularly for cross-border payments within the single market.
But the limits of replication are vast. A super-app model is unlikely to take hold in Europe. Data protection and competition rules make it impossible for a single private actor to accumulate the data and market power that Alipay commands. Features like integrated credit scoring would face significant legal and political resistance.
A different starting point
China’s system was built in a context of low banking penetration and rapid digital adoption, allowing new platforms to leapfrog legacy infrastructure entirely. Europe, by contrast, already had a mature financial system. That was an advantage — and a constraint.
From that base, Europe has been working toward a digital euro, a central bank digital currency intended to function as a digital form of cash. In principle, it would allow citizens to hold and transfer central bank money electronically, complementing existing payment methods rather than replacing them.
In practice, however, the project remains constrained. European policymakers have prioritised financial stability and privacy over rapid deployment or radical redesign. Limits on individual holdings are being considered to prevent large outflows from bank deposits, reflecting banking sector concerns about being sidelined as an intermediary.
A digital euro would strengthen Europe’s financial sovereignty and resilience because it would be built with European technology and infrastructure.
— Piero Cipollone, ECB Executive Board member
According to a SUERF Policy Brief, Visa and Mastercard process around 65 per cent of euro-area card payments. The digital euro is largely a defensive response to that dependence, driven by a desire to protect monetary sovereignty and reduce reliance on foreign-controlled payment infrastructure. As ECB Executive Board member Piero Cipollone put it in 2024, “a digital euro would strengthen Europe’s financial sovereignty and resilience because it would be built with European technology and infrastructure.”
Geopolitical strategy
China’s approach has been more expansive. The digital yuan is not just a domestic payments tool but part of a broader effort to internationalise the currency and build alternatives to dollar-based financial infrastructure. For Beijing, digital currency is an instrument of geopolitical strategy.
Yet China’s model has evolved in ways that bring it closer to existing financial structures. Rather than displacing banks or private platforms, the e-CNY operates within a two-tier system, relying on intermediaries and aligning incentives with existing actors. In that sense, the concerns visible in Europe are not so different.
China built its payment ecosystem first and is now layering state-backed money on top of infrastructure that hundreds of millions of people already use every day. Europe is moving in the opposite direction, introducing a public digital currency into a mature but fragmented system, without a comparable platform beneath it. The digital euro may yet find its footing. But the sequence matters — and China had a two-decade head start.
