Advertisements for Alipay mobile payment services of Alibaba Group are pictured in Shanghai, Dec 8, 2014. [Photo/IC]

Smartphones are likely to replace wallets in the near future as about 65 percent of the online payment deals last year were done with mobile devices, a new study said.

According to findings published by Alipay, the mobile payment unit of e-commerce giant Alibaba Group Holding Ltd, the percentage represents a big jump compared with 49.3 percent of the total transactions done by the same mode in 2014.

The company, which is the largest third-party payment service provider, said that mobile payment has been further changing people's everyday life along with the rapid growth of the online to offline business, including taxi-hailing and restaurant booking.

According to Alipay, mobile payment is more popular in China's underdeveloped western regions.

The Tibet autonomous region leads the country in mobile payment with 83.3 percent of the online payment transactions in the region made with mobile devices in 2015.

The region is followed by Guizhou, Gansu, Shaanxi and Qinghai provinces. The autonomous region and provinces on average processed nearly 80 percent of the online payment deals via mobile devices.

Li Chao, an analyst with iResearch Consulting Group, said that the lack of bricks-and-mortar business infrastructure is the main reason for the high frequency of mobile payments in the region.

"Since most of the people in the western regions would turn to online shopping sites for the products they need, it is very likely that they make more payments via smartphones compared with their counterparts in urban areas," he said.

Despite the lower frequency of using mobile payments, urban residents in China have demonstrated their consumption power by the total amount transacted via Alipay platform.

The report showed that Shanghai residents on average processed more than 100,000 yuan ($15,210) online, becoming the top Alipay users in China in terms of the total amount in 2015.

Apart from shopping online, buying Internet-enabled wealth management products has also contributed to the growing transactions on Alipay.

Alipay said the buyer of its online wealth management products on average had an annual yield of 256.7 yuan in 2015.

About 40.6 percent of the buyers of its online wealth management products are aged between 26 and 35. About 37.3 percent of them are aged between 16 and 25, mostly high school students and college students.

By integrating more and more features, such as wealth management and paying bills, into its application, Alipay has further consolidated its dominant position in China's mobile payment market.

Ma Tao, an analyst with the Beijing-based Internet consultancy Analysys International, said that Alipay accounted for about 70 percent of online payments.

However, as more and more companies are entering the mobile payment in China's vast but still largely untapped offline market, such as smartphone-enabled payment in convenience stores and movie theaters, Alipay's market share is likely to shrink in the future, he said.