‘Don’t try cashing in China’

Tram Ho

It is difficult for us who live outside of China to understand how to pay for things completely digitally in this country.

Most of the businesses there, from the most luxurious hotels to the street fruit stalls, show a QR code – a type of barcode – that people will scan with their smartphone’s camera to make payments. through China’s dominant digital payment apps, Alipay and WeChat. Paying with apps has become so standard that taxi drivers can curse you for giving them cash.

NYTimes ‘s Shira Ovide had a chat with Ray Zhong, who used to live in Beijing, about how China’s digital payment apps have created a new kind of commerce and whether China can be The country provides a glimpse of a cashless future for the rest of the world.

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In China, cash is not required to buy vegetables from the market.

How did Alipay and WeChat become so popular in China?

Credit cards were never popular in China. The country has bypassed a financial generation and has moved directly to smartphone-based digital payments.

And the app is very simple for businesses. If a business can receive a printed QR code, their business can be paid for using the app. They don’t need special machines or equipment to accept credit cards or multiple mobile payments like Apple Pay, or digital wallets of bank cards. Meanwhile, Alipay and WeChat are purer, simpler digital payment methods.

What’s useful about these payment apps?

China has a shabby banking system, as a result of history. But these apps have allowed small businesses to connect with modern financial infrastructure more easily.

Of course, paying by credit card is not too difficult. But the easier buying, even slightly, has the effect of activating different types of commerce. You probably won’t buy something on Instagram for 50 cents (about 11,000 rumors) with your credit card, but people in China are buying digital books chapter by chapter each time.

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Begging by QR code in China.

What are its downsides?

Imagine if powerful tech companies like Google knew everything you bought in your lifetime. That’s a problem.

There are also concerns that Alipay and WeChat are so dominant that no one can compete with them.

How has the Chinese government reacted to these two applications creating a financial system beyond their apparent control?

The Chinese government soon got the attention. It puts a limit on the fees that Alipay and WeChat can charge the seller. And where apps can make real money – in lending and selling investments – government wants to make sure that borrowers don’t suffer losses and hedge funds are not exposed to excessive risk.

These apps initially described themselves as alternatives to the conventional, government-backed banking system. But in the face of government scrutiny, Alipay and WeChat have been deliberately diverted to say that they are partners of banks, not competitors. Currently, a number of funds and institutions owned by the Chinese government are investors in Ant Group, the owner of Alipay.

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Foreign tourists are advised not to use cash when taking a taxi in China.

Is China a “preview version” of a future fully digitally paid world?

Alipay and WeChat are developed for specific Chinese needs. It is therefore hard to believe that similar QR code-based digital payment systems will flourish elsewhere.

And Alipay and WeChat are not perfect for solving every problem either. Some apps, like Apple Pay, are much easier to use, at least for direct payments. But Chinese apps have the advantage of online payments. You won’t need to enter a 16-digit credit card number in a small box on your computer to operate.

When you live in China, do you use payment apps?

Yes, for everything: rent payments, phone bills, food, fitness classes, train tickets, ride-hailing Didi – China’s equivalent of Uber.

What do you remember about old payment apps?

Cash and change are extremely annoying. And I hate coins. Actually, anyone likes coins, right?

Refer to NYTimes

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Source : Genk