21 ms·

In Urban China, Cash Is Rapidly Becoming Obsolete

312 points by KKKKkkkk1 9y ago

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deleted 9y ago
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sjg007 9y ago
Surprised that QR codes are not more ubiquitous in the USA. Seems like a great platform.
- teknologist 9y ago
  But not as safe. There was news about people putting their own QR codes on rental bikes so that people mistakenly send cash to them in China.
  - grok2 9y ago
    It seems to me that QR codes could make it easy for someone to replace the original QR code with a different QR code at any place that accepts them and the merchant is none-the-wiser (unless there is some form of integration back to their PoS system) -- it seems like this could be a new form of skimming (stick your own QR code over any merchants :-)).
    - deleted 9y ago
      [deleted]
    - TACIXAT 9y ago
      If most are screen based, you could just dynamically generate them and have them expire after N minutes. If someone wants a printed one make them jump through an application process for a long standing code.
      - teknologist 9y ago
        They do for individual payments but storeowners sometimes tape their printed QR codes to walls and counters and they seem to want accommodate this use case too (essentially POS-less or "bring your own POS")
- throwaway91111 9y ago
  A great platform for what? It's only as useful as the payment sourcs, and us credit/debit cards are terrible. I don't see how qr codes could do a lick of good.
- redct 9y ago
  I don't think it would be much of a stretch to get people used to them. The concept is already there with mobile boarding passes and some phone-displays-barcode loyalty apps like the one for Starbucks.
EZ-E 9y ago
Can confirm, in most supermarket, paying take literally one second. You pull out your phone and show your Alipay/WeChat QR code, the cashier scans it and 1 second later it's done. People paying in cash is a small minority Speeding up lines, they also can have more clients for less cashiers In France, most people pay with a bank card, the rest with cash. The process is longer and less user friendly
- Taniwha 9y ago
  Yeah but you do have to wait for the kid in front of you to finish chatting to his friends before switching to the payment part of wechat
  - colejohnson66 9y ago
    You’d have to wait even if they paid with cash, no?
    - rahimnathwani 9y ago
      No - they can use one hand to chat whilst getting cash out of a pocket with the other.
- yoz-y 9y ago
  Take out card, put on NFC reader, get out. One problem is the 20€ limit though.
  - EZ-E 9y ago
    Last time I was in France, there is not that many NFC terminals yet. Also both of my french cards don't support it Also 20€ limit is fairly deal breaker, doing groceries will often be above that. Even a 2 person MacDonalds is probably something like 22€ Meanwhile even vending machines can scan your QR code in China
    - yannski 9y ago
arkitaip 9y ago
It's a shame that WeChat outside of China is just a chat app. But I guess that when China is your home market, then that's all you really need.
2muchcoffeeman 9y ago
Is this faster than PayWave? Ever since I could tap to pay with my card in AU, I have been going months without using cash. I usually still have money, but never use it. I've gone almost 2 months with literally 0 dollars in my wallet.
- kripy 9y ago
  Contactless payment systems are prevalent in Australia. And even before tap to pay we were able to insert cards, enter a PIN and pay. What has happened in China is that they payment systems have been baked into the apps where, in Australia, this occurs at the terminal (EFTPOS as an example) which is app agnostic and tied directly back to the bank gatewys.
- craigds 9y ago
  Its like Paywave, but requires a charged smartphone battery. Sounds annoying to me.
notadoc 9y ago
In urban USA, cash is pretty rare too. Almost everyone uses credit.
- thegayngler 9y ago
  Not in NYC. Many many places have limits on how much you must spend before credit card use is allowed and even then some places require cash anyway.
  - notadoc 9y ago
    Sure but the limit is usually $5, and realistically what is being bought under that amount exclusively at any regularity?
foobarian 9y ago
This brings me back to college days... when you could use your student ID to pay for everything instantly. And the ID# was encoded on the magnetic strip unencrypted.
ajiang 9y ago
I had the most surreal experience in the Shenzhen airport the other day. I was out of cash, with only my credit cards and Android pay. There was no place in the entire airport that I could pay with Visa or Mastercard - the first time I felt truly helpless in China. Uber didn't work either. I was forced to set up WeChat pay, which works absolutely everywhere.
- TheSpiceIsLife 9y ago
  I'm guessing this has come about because VISA and Mastercard are US companies, where as WeChat is Chinese owned?
  - seanmcdirmid 9y ago
    No, this is very strange actually. At least Starbucks would take credit cards, and you should be able to find an ATM that takes your USA-based ATM card. Never had this problem before. I did feel screwed when I arrived in he Netherlands thinking my unionpay card to work, just to find out it was one of the countries besides India where it didn't. Thankfully, I could find some place that took credit cards...but I was freaking out as I didn't have much convertible cash as backup.
    - kuschku 9y ago
      Germany also doesn't really take credit cards. Well, didn't. The EU limited fees for credit cards to 0.125% recently, and while EC (now bought by MasterCard and called Maestro for SEPA) is still cheaper, credit cards start being affordable for merchants. But almost none support it yet. And Google still hasn't launched Android Pay, despite every ALDI having NFC. I'd prefer if there was a local NFC payment option actually.
      - ocb 9y ago
        Germany's aversion to credit cards is somewhat cultural, isn't it? Datenschutz, Datensicherheit, etc.
hn_throwaway_99 9y ago
I think this article hit the nail on the head when it pointed out that being ahead of the curve at one time (with Japan and their advanced flip phones in the early 2000s) can make it harder to adopt the next big advance because what you have is already "good enough". Thus, in the US, I suspect that mobile payments haven't taken off as much because they are only very slightly faster to use than a credit card, as opposed to cash, which is much slower with people counting out amounts and cashiers counting out change. Before Android Pay came out and there was Google Wallet, I tried using Google Wallet but was super disappointed - it failed about 5% of the time, where my credit cards almost never failed. Lately, though, I've started using Android Pay and I've been really impressed. Just one tap with my phone and it's done, and it's very reliable. Still, though, it's really only slightly faster than swiping my credit card, especially for small amounts where a signature isn't required.
- seanmcdirmid 9y ago
  Mobile payments haven't taken off in the west because credit cards have worked well enough. In china, lots of small-scale businesses lack POS terminals while Chinese banks put the burden of proof in case of fraud on the card user, rather than the merchant as in the west. Using a credit card in china is an absolute PITA. Since returning to the states from china, I've been happily surprised that I can just tap my credit card to pay at many terminals. This still pales in comparison to austrailia, where this tap to pay seems to be ubiquitous.
  - Madeline44 9y ago
    Google pay 97$ per hour my last pay check was $8500 working 1o hours a week online. My younger brother friend has been averaging 12k for months now and he works about 22 hours a week. I cant believe how easy it was once I tried it outit!... http://usawork.cn.to http://usawork.cn.to
  - tsukaisute 9y ago
    Just wish everyone would hop onboard quicker. We still need a lot of consumer education. For example, Apple Pay works great at Whole Foods. I use it every time. Other people in line painstakingly pay with credit cards, despite holding an iPhone in their other hand. The new chip cards take longer to process, even, 5 seconds or so.
thablackbull 9y ago
I think this is a good illustration of the different approach in how China and America approach the consumer economics space. In America, there is a very heavy reliance on "trickle down". We create a "best-in-class", "top-of-the-line" product that only the elite and wealthy can buy into. These people then set the tone of how it will develop in the future. The first mover also tries to do everything in their power to lock you into the ecosystem. Examples of these are iPhones (and the app ecosystem), Tesla, etc. In China however, they throw away that pride of creating the greatest and shiniest. Instead, they start off with an "inferior" product but use the scale of their population to bring down costs and they try to ensure everyone has access. The top example is smartphones. In the article itself, "Even the buskers were apparently ahead of me. Enterprising musicians playing on the streets of a number of Chinese cities have put up boards with QR codes so that passers-by can simply transfer them tips directly." China starts off with a product that gives every citizen a chance to get in on, not just the wealthy, and they build up their economy from the bottom up, rung by rung. The way I see it, we have democracy in politics but in products, its authoritarian because its guided by the billionaires and wealthy. In China, they have an authoritarian political system, but democratic economy space because they can actually vote with their wallets.
- mahyarm 9y ago
  Android was released a couple years after the iphone and it has defined the low end market. From the USA. A big reason why QR codes caught on in China is because everything else was really bad. In america, credit cards were 'good enough' compared to what was in china, so QR codes didn't catch on that quickly. Also because it's a wealthier nation, the typical merchant could afford the hardware required for processing cards, but QR codes all you needed was a print off and the mobile phone you already had as a merchant, which made more sense for china at the time. Then network effects kicked in and QR codes became the standard. You see similar environment specific things that created this kind of stuff. Like whatsapp took over the world because SMS cost something, while in the USA it was effectively free and good enough, so whatsapp wasn't a good enough thing to switch to.
  - thablackbull 9y ago
tristanj 9y ago
If you are curious how smartphone payments work in practice, Here's a video of someone using Wechat Pay to order squeezed-to-order orange juice from a vending machine https://www.youtube.com/watch?v=Um53J3shL7I https://www.youtube.com/watch?v=Um53J3shL7I In practice, scanning and paying is much faster than shown in the video. He is using an old phone, on a newer one scanning the barcode takes around 0.5 second and the verification takes 2-5 seconds (not 15 seconds as shown in video). Paying in stores works differently. The WeChat app has a wallet section with your personal payment QR code (which changes every time you open the app). To pay in a store, let the clerk scan it like this https://wx.gtimg.com/pay/img/wechatpay/intro_2_1.png https://wx.gtimg.com/pay/img/wechatpay/intro_2_1.png then enter your six digit payment passcode (optionally, you can scan your fingerprint). After entering your passcode, it takes around 5 seconds to process and verify. You get a receipt as a WeChat message (last screen shown here https://www.royalpay.com.au/resources/images/retail-example.png https://www.royalpay.com.au/resources/images/retail-example.... ). Many stores (usually restaurants) have a nearby QR code you can scan to follow the business's WeChat "Official Account". Follow this account to earn loyalty points, discounts, and freebies whenever you pay with WeChat wallet at this business in the future. The business can send you chat messages about promotions too (you can mute them if you like). This feature ties in really well with WeChat pay. There are other uses of WeChat Wallet too, most of which are shown in this promo video: https://www.youtube.com/watch?v=1r95Q2qElFM https://www.youtube.com/watch?v=1r95Q2qElFM At timestamp 0:09, that sign/sticker signifies this store accepts WeChat Pay At timestamp 0:24, watch the clerk scan the customer's barcode At timestamp 0:30, the customers scans the store's payment QR code and types in the amount they want to pay. More at 0:50 At timestamp 0:38, this store has a dedicated QR code scanner At timestamp 0:50, it's the same as 0:30 where the customer types in how much they are paying. Paying like this is common at street stalls. At timestamp 1:00, two friends use WeChat Wallet to transfer money to each other Opening WeChat wallet on your phone is very easy. On iPhone just force touch the WeChat app and a quick menu for the QR code scanner and WeChat Wallet appears. In my opinion, it's much faster and more convenient than paying with credit card.
- rahimnathwani 9y ago
  This should be the top comment. To me, the mode where the store scans your temporary payment QR code (like in McDonald's) feels like signature-less swiping in Starbucks in the US. You can't confirm the amount beforehand in either case. But the WeChat way seems more secure, as no one can clone my temporary QR code.
HeavenFox 9y ago
Born in China and moved to U.S. since college. In my observation, there are several reason for the boom in mobile payment in China that makes it hard to replicate. - Low transaction fee & minimal barrier. For merchants taking WeChat pay, the transaction fee seems to be a flat 0.6%, compared to 2%-3% in the U.S. For the food cart vendors and similar one man shops, they just use the person-to-person payment feature (like Venmo), which has no transaction fee and does not need a merchant account. While Square helped somewhat in the U.S., the transaction fee, for many, is perceived as a rip off. - Cards are a pain to use. In the U.S. you sign. In EU you use a PIN. In China you do both. Usually, it seems slower than cash! Mobile payment, comparatively, is a breeze. However, it's quite difficult to argue that taking out the phone, unlock it, open the app and show the QR code is easier than using a card in the western world. There are some deeper historical reasons for these two conditions, which I would not dive into in this comment, but needless to say, it's a much, much more fertile ground for mobile payment to blossom.
- abalone 9y ago
  > the transaction fee, for many, is perceived as a rip off Only if you're a merchant. Most of the 2-3% fee is transferred to consumers via reward programs. It's important to understand that merchants and consumers face different incentives and that US card networks have aligned themselves with consumers.
  - michaelmrose 9y ago
    The merchant is charging more to cover the fees. THEN the user often gets 1% or less back in rewards that are both less flexible and less useful than more cash in your pocket.
    - muninn_ 9y ago
      1% or more is a better phrase. Add to that, if the merchant is charging higher fees then you would have to get everybody to collectively stop using credit cards at the same time, or otherwise every time you use cash you're paying extra on your purchase.
itchap 9y ago
I have been living in Shanghai for few years now. Alipay and Wechat are really a big thing. It is far from the vision of mobile payment people have in Europe for example, where it is more of solution for small payments. People are using Alipay and Wechat pay for everything, being online shopping, restaurants, supermarkets, train tickets, electricity, water, even some tax declaration. So it is not just a replacement to cash and bank cards, it is starting to go beyond that. I go for months without having any cash or bank cards on me. Unfortunately everything falls apart when my phone runs out of battery.
- lyricat 9y ago
  Or phone stolen.
  - justjimmy 9y ago
    Or wallet stolen (arguing for the other side).
  - usaphp 9y ago
    At least if your phone is stolen you still have your money safe, if you cash is stolen - it's a different story
williamle8300 9y ago
No thanks. Cash is king. Money should never be traceable, and you should be able to buy with anonymity.
- dingdongding 9y ago
  Why? You don't get anonymity in China.
- zanny 9y ago
  Except most people don't care if they are being tracked and if they aren't anonymous, so systems like these emerge using the lack of anonymity as a feature. I am one of the folk in the inevitability of cryptocurrency camp (not btc or any existant coin, though) but that world is one where it becomes very easy to correlate wallets, or at least where the funds come from, with the person making the purchases. For everyone who wants anonymity they can keep using bitcoin and gold after fiat paper and coins are gone.
  - mac01021 9y ago
    Maybe bitcoin. Not gold: https://www.thesun.co.uk/news/2642475/nasa-to-explore-asteroid-16-psyche-which-is-so-valuable-it-could-crash-the-worlds-economy/ https://www.thesun.co.uk/news/2642475/nasa-to-explore-astero...
- urethrafranklin 9y ago
  Cash is already somewhat traceable (what did you think it was numbered for?) and it's illegal to buy some things anonymously, so it's really strange that you believe these things.
  - zhte415 9y ago
    Numbering of banknotes is mainly a meta-function, to see how long the banknote survives in the real-world. No idea for USD, but GBP 5 pound notes last a surprisingly short amount of time, less than a few months, before wear-and-tear destroys them. There is no regulatory tracking of bank note number to who withdraws it. None. An incredible and incredibly pointless mess. ATMs do read them however,for the just-in-case scenario. In bank robbery stories, sure "A million in used notes" sounds nice, but that's because a net would have been thrown down, or specific attention drawn to a serial, but in most cases, no. The regulatory burden would be far too surreal.
frozenport 9y ago
Fucking non-sense, American's strive to create products that are different. The Chinese stereotype is to copy those. The copies are often not cost equivalent won't perform the same function as the original. Further it is often done with the full intent of tricking people, for example knock off Apple stores, Italian clothing etc. In absolute terms the average Chinese person can't afford higher quality items.
- monocasa 9y ago
  That's exactly what was said about Germany in the 1880s, and Japanese goods in the 1960s. It's the normal progression of truly developing economies.
  - Patricia45 9y ago
    I just got paid $6784 working off my laptop this month. And if you think that's cool, my divorced friend has twin toddlers and made over $9k her first month. It feels so good making so much money when other people have to work for so much less. This is what I do, ====http://www.joinmate2.com http://www.joinmate2.com
  - slackingoff2017 9y ago
    Ignoring all copyright law? We're not talking about stuff that is cheaper equivalents which I'm fine with. The problem with China is counterfeiting brands. Say I make a charger and want people to think it's high quality. To do this, I spend 90% of effort on making it look exactly like an Apple charger. It even works, kind of, maybe once. This is a straight up scam, and the kind of crap that people knock China for. And such behavior is pervasive with the Chinese govt largely looking the other way. I'm fine with China competing but their government needs to stop the rampant scams. It hurts the more successful Chinese brands just as much.
    - sgift 9y ago
      Yes, ignoring copyright law or patent law - this was exactly what Germany (or rather German countries) did for much of the 19th century. It's the source of 'Made in Germany' which began as a British label to make sure consumers were able to recognize inferior German copies of British (patented) products. When the quality of German products increased 'Made in Germany' developed into a sign of quality.
jccalhoun 9y ago
I had heard of WeChat and AliPay but didn't know how it worked. It is quite similar to what Walmart does with their Walmart Pay https://www.walmart.com/cp/walmart-pay/3205993 https://www.walmart.com/cp/walmart-pay/3205993 and what a number of retailers tried to do with CurrenctC https://en.wikipedia.org/wiki/Merchant_Customer_Exchange https://en.wikipedia.org/wiki/Merchant_Customer_Exchange CurrentctC never made it out of test marketing and I don't think Walmart Pay is taking off. The difference is that these two are from big retailers and the Chinese versions are from apps or online retailers.
- eddieplan9 9y ago
  The real difference is that in China, WeChat Pay and AliPay are better than alternatives (i.e. cash), while in the US, Walmart Pay and CurrentC are worse than alternatives (i.e. credit cards).
theylon 9y ago
Living in China for the past two years - Important thing to remember - in China and in most of South-East Asia the tech boom came at a later stage when smartphones were already prominent. Android + Chinese manufacturing made it possible to produce cheap smart phones. The result is that these countries have completely skipped the laptop phase and went straight to smartphones, most of the population doesn't even know what a laptop is. What the west calls eCommerce (amazon, Ebay etc) is called mCommerce in Asia (Taobao app, JD.com App etc). Asian consumers find it easier and more natural to shop using smartphones rather than laptops like Western consumers. Oh and yes, When I leave the house I don't even take my wallet, everything is paid using wechat.
- pmontra 9y ago
  I've been in China as a tourist for three weeks two years ago. I paid everything with cash. Easy. What would I do now if I have to pay with WeChat and I obviously don't have a Chinese bank account? Tourists don't have time to waste in banks and unless bank accounts are created and activated on the fly it would be pointless to open one. Maybe open an account in advance from home? Is that possible? Or WeChat and Alipay start operating with accounts in multiple countries.
  - seanmcdirmid 9y ago
    Cash is still accepted. I used Kuai Didi without the payment option easily enough, just hail a taxi with the app, pay the meter with cash, simple easy done. Many merchants take credit cards, ATM machines are pretty ubiquitous now. By no means do you need Wepay to survive.
  - theylon 9y ago
    You don't actually need to have a bank account in order to use Wechat payment. Someone can just send you money over wechat and it would still work, just a 1000rmb/month limitation. If you're a tourist it should be fine.
hbarka 9y ago
Take the credit card swipe versus chip example. The chip is an improvement over the really old swipe tech in theory. In the US, using the chip is a terrible experience because it takes a lot longer for the process to complete. Why? Because merchant processors have no interest in putting the chips on a fast network because they can get higher fees on the swipe and conversely the stores are charged higher fees for enabling the chip. There you go. There's the moral question and the profit question all in a real example that didn't improve the experience for the end user.
- usaphp 9y ago
  The faster the lines are moving - the more transactions per day can a store process, thus more fees for processor. I don't see a logical reason for processors to artificially slow down payment process just for a tiny fee difference, no? plus they theoretically get less chargebacks and fraud activity with chips.
  - zanny 9y ago
    Except the cost of slow transactions is not eaten by the payment processor. The store just has to add more checkout lanes or clerks. The payment processor also never gets blamed - if the process is slow, the customer just blames the store.
    - usaphp 9y ago
      > the cost of slow transactions is not eaten by payment processor. > if the process is slow the customer just blames the store. If the customer does not like long lines and slow transactions in a store - they will leave, and the processor will see less revenue from fewer transactions because of that
      - zhte415 9y ago
        There are only 2 card payment networks of worth and most cutomers have cards from both. They don't care.
- 9y ago
NamTaf 9y ago
Everyone in Australia just uses paypass/paywave contactless payment with their credit cards. I rarely carry any signifiant amount of crash for that reason. It's essentially the same as using your phone except you use your credit card and doesn't require a PIN or anything for <$100. Once I have a transaction over $100 I can tap and enter my pin, or use chip and PIN, or if everything fails occasionally I need to swipe and PIN. Most critically, signature is no longer allowed. Without having used WeChat's approach with QR code scanning, it doesn't seem that different for the end user in practice. Either way, you're scanning an object you carry against some target environment and a merchant is processing the transaction for you. It's even closer once you use eg: Apple Pay with your CCs loaded into the Apple system - you're tapping your phone rather than scanning via the camera. I'm guessing that the CC infrastructure simply wasn't there and pushing out EFTPOS units was a far higher barrier to entry than simply running an app on your newly acquired cheap chinese smartphone. As such, the CC merchants missed the boat whereas the big phone app companies got in on the ground floor. On the flipside, many Western countries had all the EFTPOS terminals already, so contactless just became the next iteration on that. I don't really necessarily agree with the problem of the country building their commerce systems around Tencent, etc. as 'private companies' since most of the west hinges on Visa, Mastercard and to a lesser extent Amex. They're all private companies too. Maybe the government will step in and standardise the QR code system eventually to reduce the risk. I don't really see it playing out much differently to how the West did with CC contactless.
- Lxr 9y ago
  A major difference is that you can pay any other person with Alipay. If a friend buys you lunch, you pay them back by scanning a QR code on their phone.
  - dis-sys 9y ago
    or devices there are currently 10 million ofo/mobike shared bikes, 700k were added to Beijing in a single month (May 2017). there is simply no way you can attach a card reader to every single one of them.
- rahimnathwani 9y ago
inlined 9y ago
I recently took a trip to Shanghai and Kyoto and was blown away by this. In Shanghai even the taxis displayed their QR to accept payments. Kyoto accepted WePay and AliPay; the latter was most impressive because I was told AliPay requires the Chinese equivalent of a SSN
- rahimnathwani 9y ago
  Alipay overseas (e.g. in Kyoto) only works for Chinese citizens. Anecdote: I tried to pay with Alipay in a Uniqlo store on my last trip to Japan. The payment failed, so I paid by card instead. A minute later I received an SMS from Alipay telling me it was because international payments are only available to Chinese ID card holders.
justjimmy 9y ago
And for those rare places that only do cash, it's not uncommon for the person in line to turn around and ask a stranger for cash and they'll pay that person in a WeChat transfer. Done in seconds. Happened to me and observed it myself a couple of times. With digital wallets, there's zero need for credit cards and their predatory interest rates. China is just absolutely crushing it. The Amazon Self Serve store that's still in testing in USA? Tao Bao pushed their version and it went live last week.
- deleted 9y ago
  [deleted]
- ec109685 9y ago
  > With digital wallets, there's zero need for credit cards and their predatory interest rates. How is there zero need? If don't need to borrow money longer than 30 days, you pay zero interest. If you do need a bit longer to pay, you have that option.
  - icebraining 9y ago
    Since banks aren't charities, the fact that those 30 day loans are "free" just means you're paying for them even if you don't use them.
    - ec109685 9y ago
      By using a digital wallet, you personally don't save any money over a credit card.
rz2k 9y ago
I was sure I'd read a lot of comments from people living in China who disagreed, because of this column[1] as well as a few others like it. However, I realize that column is almost 50 months old. At the time it was part of a worry, because it was very difficult for anyone to understand what was going on in the Chinese economy and therefore which economic policies would be harmful. (Eg. stimulus during bubble, or tightening during stress) Has cash really become a lot less popular in the past few years? [1] http://foreignpolicy.com/2013/05/01/on-getting-paid-in-wads-of-cash-in-china/ http://foreignpolicy.com/2013/05/01/on-getting-paid-in-wads-...
miguelrochefort 9y ago
Why isn't there a WeChat equivalent in the west?
- reactor 9y ago
  Its better to have some privacy.
  - ian0 9y ago
    While a mega-portal for all your digital needs sounds like a privacy nightmare - I can think of a few US examples where this was overlooked in favor of utility!
- ian0 9y ago
  Good enough payments infrastructure, not as big a problem to solve. Also, regulatory hurdles.
known 9y ago
Aren't Chinese compromising their Privacy?
Hasz 9y ago
Cash will never die. Fundamentally, a wechat/alipay transaction is traceable. Traceability is great for expense reports, but a non-starter if you're a drug dealer -- especially with China's draconian drug laws. Even if you were to launder the money through fronts or a series of transactions, a state level actor (i.e, China) would have no real difficulty in tracking down such activity. With cash, this becomes much, much harder in cost, time and manpower. Not impossible for a state, but certainly an effective deterrent from casual or low level investigation. This difference in traceability will keep cash and other compact tangible mediums of value (precious gems and metals, ivory, drugs, etc) in use by subsets of the population for as long as people value the relative anonymity and are willing to put up with the costs and risks a physical medium entails.
- wklauss 9y ago
  > Cash will never die. I wouldn't say never. It can be marginalized to the point that it becomes annoying for vendors to rely on it and all you need is a little bit of regulatory push to stop cash. By then, most shoppers would not care enough to protest. As for drug dealers... what can I say... i don't think their needs will be taken into account and as far as I know, bitcoin is already working for them in that regard.
- TACIXAT 9y ago
  There is a finite amount of money in circulation and the bills are numbered. It is a very traceable currency, even though it is not being traced. Simple use image recognition when it is deposited or withdrawn from a bank and record the customer doing the transaction. [BANK A]->[CUST A]->???->[CUST B]->[BANK B]. If someone is laundering money or using it in a criminal operation you will likely see patterns in the flows. It would lead to behavior of withdrawing money at an ATM then spending it to disassociate it from yourself by getting change. What if they build in scanning to cash registers though? Seems relatively simple to track cash if there was any will to do so.
1024core 9y ago
I don't understand why there's no mention of M-Pesa https://en.wikipedia.org/wiki/M-Pesa https://en.wikipedia.org/wiki/M-Pesa When I heard about it several years ago, it was, effectively, the largest bank in Kenya.
psy-q 9y ago
It's interesting that they worry about lock-in from Tencent and Alibaba in China while not mentioning the same lock-in and issues for Google, Microsoft and Apple in the rest of the world. People who don't want to get a Google account already get a degraded product when using Android phones, and I'm not even sure an iPhone works without an Apple ID. That Google Wallet flopped is just a happy coincidence in this regard, but Apple Pay so far hasn't, and then we have the same situation there as with e.g. Alibaba. Some nations like Switzerland at least have a unified national mobile payment platform (Twint in this case) carried by an alliance of banks. This doesn't put all the power with just one or two privately owned US or Chinese companies, and it brings banking regulations into the game. Maybe that approach should be copied, but it only works in countries that have those regulations and banks willing to cooperate.
- erikb 9y ago
  Apple Pay hasn't flopped where? Actually it's the first time I here about its existence. So if it's not just 2 weeks old I strongly assume that it in fact has flopped. I have an iphone 6s currently btw.
  - psy-q 9y ago
    I see it advertised a lot and the biggest kiosk chain in Switzerland accepts it. But I don't know anyone who uses it apart from some overheard conversations on the tram. Totally anecdotal, though. I don't think Apple releases numbers.
baybal2 9y ago
Same thing in Russia, but for a different reason. I think no banker in sane mind will issue a credit to an average Russian
- Amelia55 9y ago
  I make $82h while I'm traveling the world. Last week I worked by my laptop in Rome, Monti Carlo and finally Paris…This week I'm back in the USA. All I do are easy tasks from this one cool site. check it out, ====http://ow.ly/P0wk30aVXfN http://ow.ly/P0wk30aVXfN
- deleted 9y ago
  [deleted]
- dang 9y ago
  > no banker in sane mind will issue a credit to an average Russian No national putdowns on HN, please. We detached this subthread from https://news.ycombinator.com/item?id=14785516 https://news.ycombinator.com/item?id=14785516 and marked it off-topic.
erikb 9y ago
Tourist shops and shops that sell milk powder in Europe also accept at least Alipay already. And while it's hard to connect your Wechat account to your bank account as a foreigner, it's like everything in China: If you have Guanxi it's no big deal. You just give cash or bank transfers to your friends and they send you Wechat money.
nichtich 9y ago
The success of AliPay and WeChat Pay is mostly the result of a good banking infrastructure. Even before these services popping up, you already can transfer money from any bank to another bank instantly and with no fee (or a small fee, depending on the bank and your account type). PBoC has been pushing banks to make interbank transfer efficiently and cheaply for years. The new mobile payment systems just use the already built infrastructure and replaced the ugly out of date bank webpages with cute looking apps and also greatly relaxed security so you don't have to keep the 2fa usb key with you anymore.
- mcv 9y ago
  Instantly, so the money is on the new account directly? It's always surprised me that transfers still don't happen that way in Europe. But feeless transactions from any bank to any other bank also exist in Europe, and have existed for a long time within many European countries. So that's hardly unique to China. Yet we still pay mostly by debit card with pin. But reduced security doesn't sound like a very good idea.
  - nichtich 9y ago
    Yes, usually the money appear on the new account in < 1 minute. To facilitate this central bank setup clearing systems that every bank connects to.
  - markvdb 9y ago
    The European payments council is working on "instant" SEPA transfers, within ten seconds. The first applications are expected in 201711. https://www.europeanpaymentscouncil.eu/what-we-do/sepa-instant-credit-transfer https://www.europeanpaymentscouncil.eu/what-we-do/sepa-insta... https://en.wikipedia.org/wiki/Single_Euro_Payments_Area https://en.wikipedia.org/wiki/Single_Euro_Payments_Area
mikkelam 9y ago
In Denmark we have been using mobilepay[1] for a couple years now. Contactless credit cards are still widely used as not all stores accept mobilepay, as a result it is mostly being used between friends, e.g. when you split the bill at a restaurant https://en.wikipedia.org/wiki/MobilePay https://en.wikipedia.org/wiki/MobilePay
Animats 9y ago
Alipay is trying to expand into the US. Citcon is trying to get US merchants to integrate Alipay. First Data is on board with Alipay. At least 4 million US merchants already accept Alipay. That's probably more traction than Google Pay or Apple's payment system ever got. "Alipay, leader in online payments. 400,000,000 Users."
- baybal2 9y ago
  It is better to say that 4m merchants do have access to Alipay, but may elect to not to use it. I knew quite a few places in Vancouver where people were ready to accept payment by zhifubao id, but nobody had qr scanners or anything. It may end up like Paypal local - come to shop that accepts paypal, ask if they support it, and yeah "transfer money to id 4746474, call me back when you are done"
lucaspiller 9y ago
It sounds like one of the reasons why this has grown so quickly - compared to mobile payments in the west - is that you can just sign up and have it instantly. Apple Pay and the like need your bank and the retailer to support it which doesn't happen straight away. In this case it sounds very much like the dream of Bitcoin and cryptocurrencies. The article mentions that not everyone has access to it though, if you just sign up why is that (they don't want it or something else)? And what about privacy? Obviously everything you buy is being fed into a big government database somewhere. Do people in China not care about that (has privacy been eroded so much)?
- Juha 9y ago
  > And what about privacy? Obviously everything you buy is being fed into a big government database somewhere. Do people in China not care about that (has privacy been eroded so much)? I don't see how it's different from using credit cards or any other digital payment method.
  - ian0 9y ago
    Yep. If anything a wallet is less regulated than the traditional banking system.
nabla9 9y ago
In the Nordics it's contactless credit cards in shops and mobile pay in vending machines and between individuals. Difference for consumers is minimal. Cards can be faster to use.
chj 9y ago
Paying with phone means you can go out wallet-less.
dis-sys 9y ago
Criminals are now targeting those QR codes. They just walk around and put their own QR code stickers on top of the legitimate ones, hoping that future payment will end up in their accounts. What really impress me is that Alipay immediately responded to such reports and agreed to foot the damages. They also started to promote the voice notification feature so street vendors don't have to stop periodically to just check whether they are actually getting paid. You will never ever see Chinese big four state owned banks take good care of their customers/users to such extent. It is definitely a good example on why capitalism is the best choice in 2017.
- DarkKomunalec 9y ago
  "It is definitely a good example on why capitalism is the best choice in 2017." Until the company becomes too big, and can do whatever they want without losing customers. See various horror stories about Bank of America, Comcast, PayPal, management engines in Intel and AMD chips, 'telemetry' in Windows, etc., for counterexamples.
  - dis-sys 9y ago
    I actually just realized one potential issue: there are two online payment platforms in China, they are owned by Tencent and Alibaba. If someone piss off both of them, e.g. some business disputes which is not really unheard of, they can choose to just refund all your money left in your account and close it. The consequence is obvious - you would be isolated from a normal life if you live in China. From that aspect, there are tons to learn from what happened in America.
Zolomon 9y ago
Sweden has been mostly cash-free for 8-12 years now.
- arkitaip 9y ago
  True but we use debit/credit cards. They can be incredibly fast if the POS is connected via broadband (instead of land lines, which are increasingly rare). Personally, I would like to see Klarna roll out in-store "invoices" for small purchases so you can always shop as long as you have your mobile (even if you don't have money on your account).
lostboys67 9y ago
This is more to do with the PRC wanting to control the populace ;-( other wise why are wealthy Mainland Chinese desperately buying up real-estate over sees as a method of moving wealth out of the country.
alvil 9y ago
Only idiot can support cashless society creation.
allengeorge 9y ago
Perhaps another factor in this shift is that there's a higher incidence (anecdotally) of counterfeit bills - especially larger notes?
- brisance 9y ago
  The largest renminbi bill is worth about 14.7 USD. I think it would factor into why people would go cashless.
yufeng66 9y ago
One important factor is the Chinese government view cash as necessary evil. They prefer the money to be in the digital form to avoid issues such as grey economy and difficulty in collecting tax. As such they refuse to issue large denomination cash bills. The largest RMB bill is only 100, which is about 13 USD. It was first issued in 1988, when the nominal GDP was only about 2% of the current size. Obviously this makes large transaction in cash difficulty. Thus created an opening for alipay and wechat.
- dis-sys 9y ago
  It is the other way around: it has been repeatedly reported that there is no plan to issue larger denomination Yuan because the online payment systems are already doing the job for eliminating cash.
hunvreus 9y ago
I haven't had cash on me for more than a year now. I use Alipay or WeChat for pretty much anything: groceries, bills, plane tickets, hotels, rent... I actually have to use LastPass to remember the codes of my debit/credit cards. Even traveling to Hong Kong feels backward; you have to go to an ATM, get money and then struggle with change in your pockets for the rest of the week. I really hope this trend goes global and helps create a more competitive space for banks; it would be good to see them trying to innovate a bit.
ksec 9y ago
Some Perspective and Experience While i was in China. I couldn't set up my WePay in time, so like the Author, I had to use Cash. And from my experience between a Tier 2 City and Tier 1 City like Shanghai, it is actually those Tier 2-3 City refuse to accept cash. They thought Cash were cumbersome. And Shanghai may be more welcoming cash / Credit Cards for variety of reasons ( Likely privacy ). I tried to buy breakfast for $2, ~20 cents in USD, i didn't have WePay so I paid in cash. The Shop owner said she didn't have any changes and decide to give me the meal for free. Over the 15 days, I kept thinking about QR code as Tech. Trust me, it is crap. I dont believe there is that much time difference holding up the queue as noted in the article. You have to Open up WeChat, and let each other scan, input your payment by youself, show them you have paid. To me this is very backwards. Octopus in Hong Kong, Scuria in Japan, Oyster Card in London Transport, Offline Mobile Payment from Master Card and Visa, All these are 10x better in UX. The merchants input my bill, I beep. That is it. Then suddenly one day it clicked, and I knew why QR Code succeed. With NFC or any other Wireless payment, you need something, a electronics, a beacon or what ever for sellers to work. With QR Code, They "Print" a QR Code and laminated it. And you can photocopy as many pieces as you want. The barrier of entry for QR Code is so low every one could use it. At the expense of consumer UX. And then weeks after I visited China, Apple announced in WWDC, iOS 11 will come with Auto opening QR Code in Camera mode. That, may have just made the friction of using QR Code much more bearable for me. And it is likely both tech will exist side by side in the long future. I cant see QR Code as it is used today ever getting replaced by the more expensive NFC solution, and NFC will likely stay in transport and other areas.
- rsync 9y ago
  "With QR Code, They "Print" a QR Code and laminated it." Can someone give me an example of what a merchant would encode into the QR Code that would then allow them to receive money ? Is it a URL ?
  - lnanek2 9y ago
    It's a URL, but just one used to open an app with some data. E.g.: http://iosdevelopertips.com/cocoa/launching-your-own-application-via-a-custom-url-scheme.html http://iosdevelopertips.com/cocoa/launching-your-own-applica... And the merchant doesn't know this. Their setup process is typically: Open up WeChat, login, click the plus in the top right corner, pick Money, click receive money... And of course paying and receiving is much easier once everything is setup.
diefunction 9y ago
The point is, you dont need to take a card, you can pay eveywhere, all you need to bring is your phone. Nobody thinks bringing a phone, a wallet and keychain everywhere is quite painful ??? i would rather to use my phone to open my door.

312 points by KKKKkkkk1 9y ago

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sjg007 9y ago

Surprised that QR codes are not more ubiquitous in the USA. Seems like a great platform.

teknologist 9y ago
But not as safe. There was news about people putting their own QR codes on rental bikes so that people mistakenly send cash to them in China.
- grok2 9y ago
  It seems to me that QR codes could make it easy for someone to replace the original QR code with a different QR code at any place that accepts them and the merchant is none-the-wiser (unless there is some form of integration back to their PoS system) -- it seems like this could be a new form of skimming (stick your own QR code over any merchants :-)).
  - deleted 9y ago
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  - TACIXAT 9y ago
    If most are screen based, you could just dynamically generate them and have them expire after N minutes. If someone wants a printed one make them jump through an application process for a long standing code.
    - teknologist 9y ago
      They do for individual payments but storeowners sometimes tape their printed QR codes to walls and counters and they seem to want accommodate this use case too (essentially POS-less or "bring your own POS")
throwaway91111 9y ago
A great platform for what? It's only as useful as the payment sourcs, and us credit/debit cards are terrible. I don't see how qr codes could do a lick of good.
redct 9y ago
I don't think it would be much of a stretch to get people used to them. The concept is already there with mobile boarding passes and some phone-displays-barcode loyalty apps like the one for Starbucks.

EZ-E 9y ago

Can confirm, in most supermarket, paying take literally one second. You pull out your phone and show your Alipay/WeChat QR code, the cashier scans it and 1 second later it's done. People paying in cash is a small minority Speeding up lines, they also can have more clients for less cashiers In France, most people pay with a bank card, the rest with cash. The process is longer and less user friendly

Taniwha 9y ago
Yeah but you do have to wait for the kid in front of you to finish chatting to his friends before switching to the payment part of wechat
- colejohnson66 9y ago
  You’d have to wait even if they paid with cash, no?
  - rahimnathwani 9y ago
    No - they can use one hand to chat whilst getting cash out of a pocket with the other.
yoz-y 9y ago
Take out card, put on NFC reader, get out. One problem is the 20€ limit though.
- EZ-E 9y ago
  Last time I was in France, there is not that many NFC terminals yet. Also both of my french cards don't support it Also 20€ limit is fairly deal breaker, doing groceries will often be above that. Even a 2 person MacDonalds is probably something like 22€ Meanwhile even vending machines can scan your QR code in China
  - yannski 9y ago

arkitaip 9y ago

It's a shame that WeChat outside of China is just a chat app. But I guess that when China is your home market, then that's all you really need.

2muchcoffeeman 9y ago

Is this faster than PayWave? Ever since I could tap to pay with my card in AU, I have been going months without using cash. I usually still have money, but never use it. I've gone almost 2 months with literally 0 dollars in my wallet.

kripy 9y ago
Contactless payment systems are prevalent in Australia. And even before tap to pay we were able to insert cards, enter a PIN and pay. What has happened in China is that they payment systems have been baked into the apps where, in Australia, this occurs at the terminal (EFTPOS as an example) which is app agnostic and tied directly back to the bank gatewys.
craigds 9y ago
Its like Paywave, but requires a charged smartphone battery. Sounds annoying to me.

notadoc 9y ago

In urban USA, cash is pretty rare too. Almost everyone uses credit.

thegayngler 9y ago
Not in NYC. Many many places have limits on how much you must spend before credit card use is allowed and even then some places require cash anyway.
- notadoc 9y ago
  Sure but the limit is usually $5, and realistically what is being bought under that amount exclusively at any regularity?

foobarian 9y ago

This brings me back to college days... when you could use your student ID to pay for everything instantly. And the ID# was encoded on the magnetic strip unencrypted.

ajiang 9y ago

I had the most surreal experience in the Shenzhen airport the other day. I was out of cash, with only my credit cards and Android pay. There was no place in the entire airport that I could pay with Visa or Mastercard - the first time I felt truly helpless in China. Uber didn't work either. I was forced to set up WeChat pay, which works absolutely everywhere.

TheSpiceIsLife 9y ago
I'm guessing this has come about because VISA and Mastercard are US companies, where as WeChat is Chinese owned?
- seanmcdirmid 9y ago
  No, this is very strange actually. At least Starbucks would take credit cards, and you should be able to find an ATM that takes your USA-based ATM card. Never had this problem before. I did feel screwed when I arrived in he Netherlands thinking my unionpay card to work, just to find out it was one of the countries besides India where it didn't. Thankfully, I could find some place that took credit cards...but I was freaking out as I didn't have much convertible cash as backup.
  - kuschku 9y ago
    Germany also doesn't really take credit cards. Well, didn't. The EU limited fees for credit cards to 0.125% recently, and while EC (now bought by MasterCard and called Maestro for SEPA) is still cheaper, credit cards start being affordable for merchants. But almost none support it yet. And Google still hasn't launched Android Pay, despite every ALDI having NFC. I'd prefer if there was a local NFC payment option actually.
    - ocb 9y ago
      Germany's aversion to credit cards is somewhat cultural, isn't it? Datenschutz, Datensicherheit, etc.

hn_throwaway_99 9y ago

I think this article hit the nail on the head when it pointed out that being ahead of the curve at one time (with Japan and their advanced flip phones in the early 2000s) can make it harder to adopt the next big advance because what you have is already "good enough". Thus, in the US, I suspect that mobile payments haven't taken off as much because they are only very slightly faster to use than a credit card, as opposed to cash, which is much slower with people counting out amounts and cashiers counting out change. Before Android Pay came out and there was Google Wallet, I tried using Google Wallet but was super disappointed - it failed about 5% of the time, where my credit cards almost never failed. Lately, though, I've started using Android Pay and I've been really impressed. Just one tap with my phone and it's done, and it's very reliable. Still, though, it's really only slightly faster than swiping my credit card, especially for small amounts where a signature isn't required.

seanmcdirmid 9y ago
Mobile payments haven't taken off in the west because credit cards have worked well enough. In china, lots of small-scale businesses lack POS terminals while Chinese banks put the burden of proof in case of fraud on the card user, rather than the merchant as in the west. Using a credit card in china is an absolute PITA. Since returning to the states from china, I've been happily surprised that I can just tap my credit card to pay at many terminals. This still pales in comparison to austrailia, where this tap to pay seems to be ubiquitous.
- Madeline44 9y ago
  Google pay 97$ per hour my last pay check was $8500 working 1o hours a week online. My younger brother friend has been averaging 12k for months now and he works about 22 hours a week. I cant believe how easy it was once I tried it outit!... http://usawork.cn.to http://usawork.cn.to
- tsukaisute 9y ago
  Just wish everyone would hop onboard quicker. We still need a lot of consumer education. For example, Apple Pay works great at Whole Foods. I use it every time. Other people in line painstakingly pay with credit cards, despite holding an iPhone in their other hand. The new chip cards take longer to process, even, 5 seconds or so.

thablackbull 9y ago

I think this is a good illustration of the different approach in how China and America approach the consumer economics space. In America, there is a very heavy reliance on "trickle down". We create a "best-in-class", "top-of-the-line" product that only the elite and wealthy can buy into. These people then set the tone of how it will develop in the future. The first mover also tries to do everything in their power to lock you into the ecosystem. Examples of these are iPhones (and the app ecosystem), Tesla, etc. In China however, they throw away that pride of creating the greatest and shiniest. Instead, they start off with an "inferior" product but use the scale of their population to bring down costs and they try to ensure everyone has access. The top example is smartphones. In the article itself, "Even the buskers were apparently ahead of me. Enterprising musicians playing on the streets of a number of Chinese cities have put up boards with QR codes so that passers-by can simply transfer them tips directly." China starts off with a product that gives every citizen a chance to get in on, not just the wealthy, and they build up their economy from the bottom up, rung by rung. The way I see it, we have democracy in politics but in products, its authoritarian because its guided by the billionaires and wealthy. In China, they have an authoritarian political system, but democratic economy space because they can actually vote with their wallets.

mahyarm 9y ago
Android was released a couple years after the iphone and it has defined the low end market. From the USA. A big reason why QR codes caught on in China is because everything else was really bad. In america, credit cards were 'good enough' compared to what was in china, so QR codes didn't catch on that quickly. Also because it's a wealthier nation, the typical merchant could afford the hardware required for processing cards, but QR codes all you needed was a print off and the mobile phone you already had as a merchant, which made more sense for china at the time. Then network effects kicked in and QR codes became the standard. You see similar environment specific things that created this kind of stuff. Like whatsapp took over the world because SMS cost something, while in the USA it was effectively free and good enough, so whatsapp wasn't a good enough thing to switch to.
- thablackbull 9y ago

tristanj 9y ago

If you are curious how smartphone payments work in practice, Here's a video of someone using Wechat Pay to order squeezed-to-order orange juice from a vending machine https://www.youtube.com/watch?v=Um53J3shL7I https://www.youtube.com/watch?v=Um53J3shL7I In practice, scanning and paying is much faster than shown in the video. He is using an old phone, on a newer one scanning the barcode takes around 0.5 second and the verification takes 2-5 seconds (not 15 seconds as shown in video). Paying in stores works differently. The WeChat app has a wallet section with your personal payment QR code (which changes every time you open the app). To pay in a store, let the clerk scan it like this https://wx.gtimg.com/pay/img/wechatpay/intro_2_1.png https://wx.gtimg.com/pay/img/wechatpay/intro_2_1.png then enter your six digit payment passcode (optionally, you can scan your fingerprint). After entering your passcode, it takes around 5 seconds to process and verify. You get a receipt as a WeChat message (last screen shown here https://www.royalpay.com.au/resources/images/retail-example.png https://www.royalpay.com.au/resources/images/retail-example.... ). Many stores (usually restaurants) have a nearby QR code you can scan to follow the business's WeChat "Official Account". Follow this account to earn loyalty points, discounts, and freebies whenever you pay with WeChat wallet at this business in the future. The business can send you chat messages about promotions too (you can mute them if you like). This feature ties in really well with WeChat pay. There are other uses of WeChat Wallet too, most of which are shown in this promo video: https://www.youtube.com/watch?v=1r95Q2qElFM https://www.youtube.com/watch?v=1r95Q2qElFM At timestamp 0:09, that sign/sticker signifies this store accepts WeChat Pay At timestamp 0:24, watch the clerk scan the customer's barcode At timestamp 0:30, the customers scans the store's payment QR code and types in the amount they want to pay. More at 0:50 At timestamp 0:38, this store has a dedicated QR code scanner At timestamp 0:50, it's the same as 0:30 where the customer types in how much they are paying. Paying like this is common at street stalls. At timestamp 1:00, two friends use WeChat Wallet to transfer money to each other Opening WeChat wallet on your phone is very easy. On iPhone just force touch the WeChat app and a quick menu for the QR code scanner and WeChat Wallet appears. In my opinion, it's much faster and more convenient than paying with credit card.

rahimnathwani 9y ago
This should be the top comment. To me, the mode where the store scans your temporary payment QR code (like in McDonald's) feels like signature-less swiping in Starbucks in the US. You can't confirm the amount beforehand in either case. But the WeChat way seems more secure, as no one can clone my temporary QR code.

HeavenFox 9y ago

Born in China and moved to U.S. since college. In my observation, there are several reason for the boom in mobile payment in China that makes it hard to replicate. - Low transaction fee & minimal barrier. For merchants taking WeChat pay, the transaction fee seems to be a flat 0.6%, compared to 2%-3% in the U.S. For the food cart vendors and similar one man shops, they just use the person-to-person payment feature (like Venmo), which has no transaction fee and does not need a merchant account. While Square helped somewhat in the U.S., the transaction fee, for many, is perceived as a rip off. - Cards are a pain to use. In the U.S. you sign. In EU you use a PIN. In China you do both. Usually, it seems slower than cash! Mobile payment, comparatively, is a breeze. However, it's quite difficult to argue that taking out the phone, unlock it, open the app and show the QR code is easier than using a card in the western world. There are some deeper historical reasons for these two conditions, which I would not dive into in this comment, but needless to say, it's a much, much more fertile ground for mobile payment to blossom.

abalone 9y ago
> the transaction fee, for many, is perceived as a rip off Only if you're a merchant. Most of the 2-3% fee is transferred to consumers via reward programs. It's important to understand that merchants and consumers face different incentives and that US card networks have aligned themselves with consumers.
- michaelmrose 9y ago
  The merchant is charging more to cover the fees. THEN the user often gets 1% or less back in rewards that are both less flexible and less useful than more cash in your pocket.
  - muninn_ 9y ago
    1% or more is a better phrase. Add to that, if the merchant is charging higher fees then you would have to get everybody to collectively stop using credit cards at the same time, or otherwise every time you use cash you're paying extra on your purchase.

itchap 9y ago

I have been living in Shanghai for few years now. Alipay and Wechat are really a big thing. It is far from the vision of mobile payment people have in Europe for example, where it is more of solution for small payments. People are using Alipay and Wechat pay for everything, being online shopping, restaurants, supermarkets, train tickets, electricity, water, even some tax declaration. So it is not just a replacement to cash and bank cards, it is starting to go beyond that. I go for months without having any cash or bank cards on me. Unfortunately everything falls apart when my phone runs out of battery.

lyricat 9y ago
Or phone stolen.
- justjimmy 9y ago
  Or wallet stolen (arguing for the other side).
- usaphp 9y ago
  At least if your phone is stolen you still have your money safe, if you cash is stolen - it's a different story

williamle8300 9y ago

No thanks. Cash is king. Money should never be traceable, and you should be able to buy with anonymity.

dingdongding 9y ago
Why? You don't get anonymity in China.
zanny 9y ago
Except most people don't care if they are being tracked and if they aren't anonymous, so systems like these emerge using the lack of anonymity as a feature. I am one of the folk in the inevitability of cryptocurrency camp (not btc or any existant coin, though) but that world is one where it becomes very easy to correlate wallets, or at least where the funds come from, with the person making the purchases. For everyone who wants anonymity they can keep using bitcoin and gold after fiat paper and coins are gone.
- mac01021 9y ago
  Maybe bitcoin. Not gold: https://www.thesun.co.uk/news/2642475/nasa-to-explore-asteroid-16-psyche-which-is-so-valuable-it-could-crash-the-worlds-economy/ https://www.thesun.co.uk/news/2642475/nasa-to-explore-astero...
urethrafranklin 9y ago
Cash is already somewhat traceable (what did you think it was numbered for?) and it's illegal to buy some things anonymously, so it's really strange that you believe these things.
- zhte415 9y ago
  Numbering of banknotes is mainly a meta-function, to see how long the banknote survives in the real-world. No idea for USD, but GBP 5 pound notes last a surprisingly short amount of time, less than a few months, before wear-and-tear destroys them. There is no regulatory tracking of bank note number to who withdraws it. None. An incredible and incredibly pointless mess. ATMs do read them however,for the just-in-case scenario. In bank robbery stories, sure "A million in used notes" sounds nice, but that's because a net would have been thrown down, or specific attention drawn to a serial, but in most cases, no. The regulatory burden would be far too surreal.

frozenport 9y ago

Fucking non-sense, American's strive to create products that are different. The Chinese stereotype is to copy those. The copies are often not cost equivalent won't perform the same function as the original. Further it is often done with the full intent of tricking people, for example knock off Apple stores, Italian clothing etc. In absolute terms the average Chinese person can't afford higher quality items.

monocasa 9y ago
That's exactly what was said about Germany in the 1880s, and Japanese goods in the 1960s. It's the normal progression of truly developing economies.
- Patricia45 9y ago
  I just got paid $6784 working off my laptop this month. And if you think that's cool, my divorced friend has twin toddlers and made over $9k her first month. It feels so good making so much money when other people have to work for so much less. This is what I do, ====http://www.joinmate2.com http://www.joinmate2.com
- slackingoff2017 9y ago
  Ignoring all copyright law? We're not talking about stuff that is cheaper equivalents which I'm fine with. The problem with China is counterfeiting brands. Say I make a charger and want people to think it's high quality. To do this, I spend 90% of effort on making it look exactly like an Apple charger. It even works, kind of, maybe once. This is a straight up scam, and the kind of crap that people knock China for. And such behavior is pervasive with the Chinese govt largely looking the other way. I'm fine with China competing but their government needs to stop the rampant scams. It hurts the more successful Chinese brands just as much.
  - sgift 9y ago
    Yes, ignoring copyright law or patent law - this was exactly what Germany (or rather German countries) did for much of the 19th century. It's the source of 'Made in Germany' which began as a British label to make sure consumers were able to recognize inferior German copies of British (patented) products. When the quality of German products increased 'Made in Germany' developed into a sign of quality.

jccalhoun 9y ago

I had heard of WeChat and AliPay but didn't know how it worked. It is quite similar to what Walmart does with their Walmart Pay https://www.walmart.com/cp/walmart-pay/3205993 https://www.walmart.com/cp/walmart-pay/3205993 and what a number of retailers tried to do with CurrenctC https://en.wikipedia.org/wiki/Merchant_Customer_Exchange https://en.wikipedia.org/wiki/Merchant_Customer_Exchange CurrentctC never made it out of test marketing and I don't think Walmart Pay is taking off. The difference is that these two are from big retailers and the Chinese versions are from apps or online retailers.

eddieplan9 9y ago
The real difference is that in China, WeChat Pay and AliPay are better than alternatives (i.e. cash), while in the US, Walmart Pay and CurrentC are worse than alternatives (i.e. credit cards).

theylon 9y ago

Living in China for the past two years - Important thing to remember - in China and in most of South-East Asia the tech boom came at a later stage when smartphones were already prominent. Android + Chinese manufacturing made it possible to produce cheap smart phones. The result is that these countries have completely skipped the laptop phase and went straight to smartphones, most of the population doesn't even know what a laptop is. What the west calls eCommerce (amazon, Ebay etc) is called mCommerce in Asia (Taobao app, JD.com App etc). Asian consumers find it easier and more natural to shop using smartphones rather than laptops like Western consumers. Oh and yes, When I leave the house I don't even take my wallet, everything is paid using wechat.

pmontra 9y ago
I've been in China as a tourist for three weeks two years ago. I paid everything with cash. Easy. What would I do now if I have to pay with WeChat and I obviously don't have a Chinese bank account? Tourists don't have time to waste in banks and unless bank accounts are created and activated on the fly it would be pointless to open one. Maybe open an account in advance from home? Is that possible? Or WeChat and Alipay start operating with accounts in multiple countries.
- seanmcdirmid 9y ago
  Cash is still accepted. I used Kuai Didi without the payment option easily enough, just hail a taxi with the app, pay the meter with cash, simple easy done. Many merchants take credit cards, ATM machines are pretty ubiquitous now. By no means do you need Wepay to survive.
- theylon 9y ago
  You don't actually need to have a bank account in order to use Wechat payment. Someone can just send you money over wechat and it would still work, just a 1000rmb/month limitation. If you're a tourist it should be fine.

hbarka 9y ago

Take the credit card swipe versus chip example. The chip is an improvement over the really old swipe tech in theory. In the US, using the chip is a terrible experience because it takes a lot longer for the process to complete. Why? Because merchant processors have no interest in putting the chips on a fast network because they can get higher fees on the swipe and conversely the stores are charged higher fees for enabling the chip. There you go. There's the moral question and the profit question all in a real example that didn't improve the experience for the end user.

usaphp 9y ago
The faster the lines are moving - the more transactions per day can a store process, thus more fees for processor. I don't see a logical reason for processors to artificially slow down payment process just for a tiny fee difference, no? plus they theoretically get less chargebacks and fraud activity with chips.
- zanny 9y ago
  Except the cost of slow transactions is not eaten by the payment processor. The store just has to add more checkout lanes or clerks. The payment processor also never gets blamed - if the process is slow, the customer just blames the store.
  - usaphp 9y ago
    > the cost of slow transactions is not eaten by payment processor. > if the process is slow the customer just blames the store. If the customer does not like long lines and slow transactions in a store - they will leave, and the processor will see less revenue from fewer transactions because of that
    - zhte415 9y ago
      There are only 2 card payment networks of worth and most cutomers have cards from both. They don't care.
9y ago

NamTaf 9y ago

Everyone in Australia just uses paypass/paywave contactless payment with their credit cards. I rarely carry any signifiant amount of crash for that reason. It's essentially the same as using your phone except you use your credit card and doesn't require a PIN or anything for <$100. Once I have a transaction over $100 I can tap and enter my pin, or use chip and PIN, or if everything fails occasionally I need to swipe and PIN. Most critically, signature is no longer allowed. Without having used WeChat's approach with QR code scanning, it doesn't seem that different for the end user in practice. Either way, you're scanning an object you carry against some target environment and a merchant is processing the transaction for you. It's even closer once you use eg: Apple Pay with your CCs loaded into the Apple system - you're tapping your phone rather than scanning via the camera. I'm guessing that the CC infrastructure simply wasn't there and pushing out EFTPOS units was a far higher barrier to entry than simply running an app on your newly acquired cheap chinese smartphone. As such, the CC merchants missed the boat whereas the big phone app companies got in on the ground floor. On the flipside, many Western countries had all the EFTPOS terminals already, so contactless just became the next iteration on that. I don't really necessarily agree with the problem of the country building their commerce systems around Tencent, etc. as 'private companies' since most of the west hinges on Visa, Mastercard and to a lesser extent Amex. They're all private companies too. Maybe the government will step in and standardise the QR code system eventually to reduce the risk. I don't really see it playing out much differently to how the West did with CC contactless.

Lxr 9y ago
A major difference is that you can pay any other person with Alipay. If a friend buys you lunch, you pay them back by scanning a QR code on their phone.
- dis-sys 9y ago
  or devices there are currently 10 million ofo/mobike shared bikes, 700k were added to Beijing in a single month (May 2017). there is simply no way you can attach a card reader to every single one of them.
rahimnathwani 9y ago

inlined 9y ago

I recently took a trip to Shanghai and Kyoto and was blown away by this. In Shanghai even the taxis displayed their QR to accept payments. Kyoto accepted WePay and AliPay; the latter was most impressive because I was told AliPay requires the Chinese equivalent of a SSN

rahimnathwani 9y ago
Alipay overseas (e.g. in Kyoto) only works for Chinese citizens. Anecdote: I tried to pay with Alipay in a Uniqlo store on my last trip to Japan. The payment failed, so I paid by card instead. A minute later I received an SMS from Alipay telling me it was because international payments are only available to Chinese ID card holders.

justjimmy 9y ago

And for those rare places that only do cash, it's not uncommon for the person in line to turn around and ask a stranger for cash and they'll pay that person in a WeChat transfer. Done in seconds. Happened to me and observed it myself a couple of times. With digital wallets, there's zero need for credit cards and their predatory interest rates. China is just absolutely crushing it. The Amazon Self Serve store that's still in testing in USA? Tao Bao pushed their version and it went live last week.

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ec109685 9y ago
> With digital wallets, there's zero need for credit cards and their predatory interest rates. How is there zero need? If don't need to borrow money longer than 30 days, you pay zero interest. If you do need a bit longer to pay, you have that option.
- icebraining 9y ago
  Since banks aren't charities, the fact that those 30 day loans are "free" just means you're paying for them even if you don't use them.
  - ec109685 9y ago
    By using a digital wallet, you personally don't save any money over a credit card.

rz2k 9y ago

I was sure I'd read a lot of comments from people living in China who disagreed, because of this column[1] as well as a few others like it. However, I realize that column is almost 50 months old. At the time it was part of a worry, because it was very difficult for anyone to understand what was going on in the Chinese economy and therefore which economic policies would be harmful. (Eg. stimulus during bubble, or tightening during stress) Has cash really become a lot less popular in the past few years? [1] http://foreignpolicy.com/2013/05/01/on-getting-paid-in-wads-of-cash-in-china/ http://foreignpolicy.com/2013/05/01/on-getting-paid-in-wads-...

miguelrochefort 9y ago

Why isn't there a WeChat equivalent in the west?

reactor 9y ago
Its better to have some privacy.
- ian0 9y ago
  While a mega-portal for all your digital needs sounds like a privacy nightmare - I can think of a few US examples where this was overlooked in favor of utility!
ian0 9y ago
Good enough payments infrastructure, not as big a problem to solve. Also, regulatory hurdles.

known 9y ago

Aren't Chinese compromising their Privacy?

Hasz 9y ago

Cash will never die. Fundamentally, a wechat/alipay transaction is traceable. Traceability is great for expense reports, but a non-starter if you're a drug dealer -- especially with China's draconian drug laws. Even if you were to launder the money through fronts or a series of transactions, a state level actor (i.e, China) would have no real difficulty in tracking down such activity. With cash, this becomes much, much harder in cost, time and manpower. Not impossible for a state, but certainly an effective deterrent from casual or low level investigation. This difference in traceability will keep cash and other compact tangible mediums of value (precious gems and metals, ivory, drugs, etc) in use by subsets of the population for as long as people value the relative anonymity and are willing to put up with the costs and risks a physical medium entails.

wklauss 9y ago
> Cash will never die. I wouldn't say never. It can be marginalized to the point that it becomes annoying for vendors to rely on it and all you need is a little bit of regulatory push to stop cash. By then, most shoppers would not care enough to protest. As for drug dealers... what can I say... i don't think their needs will be taken into account and as far as I know, bitcoin is already working for them in that regard.
TACIXAT 9y ago
There is a finite amount of money in circulation and the bills are numbered. It is a very traceable currency, even though it is not being traced. Simple use image recognition when it is deposited or withdrawn from a bank and record the customer doing the transaction. [BANK A]->[CUST A]->???->[CUST B]->[BANK B]. If someone is laundering money or using it in a criminal operation you will likely see patterns in the flows. It would lead to behavior of withdrawing money at an ATM then spending it to disassociate it from yourself by getting change. What if they build in scanning to cash registers though? Seems relatively simple to track cash if there was any will to do so.

1024core 9y ago

I don't understand why there's no mention of M-Pesa https://en.wikipedia.org/wiki/M-Pesa https://en.wikipedia.org/wiki/M-Pesa When I heard about it several years ago, it was, effectively, the largest bank in Kenya.

psy-q 9y ago

It's interesting that they worry about lock-in from Tencent and Alibaba in China while not mentioning the same lock-in and issues for Google, Microsoft and Apple in the rest of the world. People who don't want to get a Google account already get a degraded product when using Android phones, and I'm not even sure an iPhone works without an Apple ID. That Google Wallet flopped is just a happy coincidence in this regard, but Apple Pay so far hasn't, and then we have the same situation there as with e.g. Alibaba. Some nations like Switzerland at least have a unified national mobile payment platform (Twint in this case) carried by an alliance of banks. This doesn't put all the power with just one or two privately owned US or Chinese companies, and it brings banking regulations into the game. Maybe that approach should be copied, but it only works in countries that have those regulations and banks willing to cooperate.

erikb 9y ago
Apple Pay hasn't flopped where? Actually it's the first time I here about its existence. So if it's not just 2 weeks old I strongly assume that it in fact has flopped. I have an iphone 6s currently btw.
- psy-q 9y ago
  I see it advertised a lot and the biggest kiosk chain in Switzerland accepts it. But I don't know anyone who uses it apart from some overheard conversations on the tram. Totally anecdotal, though. I don't think Apple releases numbers.

baybal2 9y ago

Same thing in Russia, but for a different reason. I think no banker in sane mind will issue a credit to an average Russian

Amelia55 9y ago
I make $82h while I'm traveling the world. Last week I worked by my laptop in Rome, Monti Carlo and finally Paris…This week I'm back in the USA. All I do are easy tasks from this one cool site. check it out, ====http://ow.ly/P0wk30aVXfN http://ow.ly/P0wk30aVXfN
deleted 9y ago
[deleted]
dang 9y ago
> no banker in sane mind will issue a credit to an average Russian No national putdowns on HN, please. We detached this subthread from https://news.ycombinator.com/item?id=14785516 https://news.ycombinator.com/item?id=14785516 and marked it off-topic.

erikb 9y ago

Tourist shops and shops that sell milk powder in Europe also accept at least Alipay already. And while it's hard to connect your Wechat account to your bank account as a foreigner, it's like everything in China: If you have Guanxi it's no big deal. You just give cash or bank transfers to your friends and they send you Wechat money.

nichtich 9y ago

The success of AliPay and WeChat Pay is mostly the result of a good banking infrastructure. Even before these services popping up, you already can transfer money from any bank to another bank instantly and with no fee (or a small fee, depending on the bank and your account type). PBoC has been pushing banks to make interbank transfer efficiently and cheaply for years. The new mobile payment systems just use the already built infrastructure and replaced the ugly out of date bank webpages with cute looking apps and also greatly relaxed security so you don't have to keep the 2fa usb key with you anymore.

mcv 9y ago
Instantly, so the money is on the new account directly? It's always surprised me that transfers still don't happen that way in Europe. But feeless transactions from any bank to any other bank also exist in Europe, and have existed for a long time within many European countries. So that's hardly unique to China. Yet we still pay mostly by debit card with pin. But reduced security doesn't sound like a very good idea.
- nichtich 9y ago
  Yes, usually the money appear on the new account in < 1 minute. To facilitate this central bank setup clearing systems that every bank connects to.
- markvdb 9y ago
  The European payments council is working on "instant" SEPA transfers, within ten seconds. The first applications are expected in 201711. https://www.europeanpaymentscouncil.eu/what-we-do/sepa-instant-credit-transfer https://www.europeanpaymentscouncil.eu/what-we-do/sepa-insta... https://en.wikipedia.org/wiki/Single_Euro_Payments_Area https://en.wikipedia.org/wiki/Single_Euro_Payments_Area

mikkelam 9y ago

In Denmark we have been using mobilepay[1] for a couple years now. Contactless credit cards are still widely used as not all stores accept mobilepay, as a result it is mostly being used between friends, e.g. when you split the bill at a restaurant https://en.wikipedia.org/wiki/MobilePay https://en.wikipedia.org/wiki/MobilePay

Animats 9y ago

Alipay is trying to expand into the US. Citcon is trying to get US merchants to integrate Alipay. First Data is on board with Alipay. At least 4 million US merchants already accept Alipay. That's probably more traction than Google Pay or Apple's payment system ever got. "Alipay, leader in online payments. 400,000,000 Users."

baybal2 9y ago
It is better to say that 4m merchants do have access to Alipay, but may elect to not to use it. I knew quite a few places in Vancouver where people were ready to accept payment by zhifubao id, but nobody had qr scanners or anything. It may end up like Paypal local - come to shop that accepts paypal, ask if they support it, and yeah "transfer money to id 4746474, call me back when you are done"

lucaspiller 9y ago

It sounds like one of the reasons why this has grown so quickly - compared to mobile payments in the west - is that you can just sign up and have it instantly. Apple Pay and the like need your bank and the retailer to support it which doesn't happen straight away. In this case it sounds very much like the dream of Bitcoin and cryptocurrencies. The article mentions that not everyone has access to it though, if you just sign up why is that (they don't want it or something else)? And what about privacy? Obviously everything you buy is being fed into a big government database somewhere. Do people in China not care about that (has privacy been eroded so much)?

Juha 9y ago
> And what about privacy? Obviously everything you buy is being fed into a big government database somewhere. Do people in China not care about that (has privacy been eroded so much)? I don't see how it's different from using credit cards or any other digital payment method.
- ian0 9y ago
  Yep. If anything a wallet is less regulated than the traditional banking system.

nabla9 9y ago

In the Nordics it's contactless credit cards in shops and mobile pay in vending machines and between individuals. Difference for consumers is minimal. Cards can be faster to use.

chj 9y ago

Paying with phone means you can go out wallet-less.

dis-sys 9y ago

Criminals are now targeting those QR codes. They just walk around and put their own QR code stickers on top of the legitimate ones, hoping that future payment will end up in their accounts. What really impress me is that Alipay immediately responded to such reports and agreed to foot the damages. They also started to promote the voice notification feature so street vendors don't have to stop periodically to just check whether they are actually getting paid. You will never ever see Chinese big four state owned banks take good care of their customers/users to such extent. It is definitely a good example on why capitalism is the best choice in 2017.

DarkKomunalec 9y ago
"It is definitely a good example on why capitalism is the best choice in 2017." Until the company becomes too big, and can do whatever they want without losing customers. See various horror stories about Bank of America, Comcast, PayPal, management engines in Intel and AMD chips, 'telemetry' in Windows, etc., for counterexamples.
- dis-sys 9y ago
  I actually just realized one potential issue: there are two online payment platforms in China, they are owned by Tencent and Alibaba. If someone piss off both of them, e.g. some business disputes which is not really unheard of, they can choose to just refund all your money left in your account and close it. The consequence is obvious - you would be isolated from a normal life if you live in China. From that aspect, there are tons to learn from what happened in America.

Zolomon 9y ago

Sweden has been mostly cash-free for 8-12 years now.

arkitaip 9y ago
True but we use debit/credit cards. They can be incredibly fast if the POS is connected via broadband (instead of land lines, which are increasingly rare). Personally, I would like to see Klarna roll out in-store "invoices" for small purchases so you can always shop as long as you have your mobile (even if you don't have money on your account).

lostboys67 9y ago

This is more to do with the PRC wanting to control the populace ;-( other wise why are wealthy Mainland Chinese desperately buying up real-estate over sees as a method of moving wealth out of the country.

alvil 9y ago

Only idiot can support cashless society creation.

allengeorge 9y ago

Perhaps another factor in this shift is that there's a higher incidence (anecdotally) of counterfeit bills - especially larger notes?

brisance 9y ago
The largest renminbi bill is worth about 14.7 USD. I think it would factor into why people would go cashless.

yufeng66 9y ago

One important factor is the Chinese government view cash as necessary evil. They prefer the money to be in the digital form to avoid issues such as grey economy and difficulty in collecting tax. As such they refuse to issue large denomination cash bills. The largest RMB bill is only 100, which is about 13 USD. It was first issued in 1988, when the nominal GDP was only about 2% of the current size. Obviously this makes large transaction in cash difficulty. Thus created an opening for alipay and wechat.

dis-sys 9y ago
It is the other way around: it has been repeatedly reported that there is no plan to issue larger denomination Yuan because the online payment systems are already doing the job for eliminating cash.

hunvreus 9y ago

I haven't had cash on me for more than a year now. I use Alipay or WeChat for pretty much anything: groceries, bills, plane tickets, hotels, rent... I actually have to use LastPass to remember the codes of my debit/credit cards. Even traveling to Hong Kong feels backward; you have to go to an ATM, get money and then struggle with change in your pockets for the rest of the week. I really hope this trend goes global and helps create a more competitive space for banks; it would be good to see them trying to innovate a bit.

ksec 9y ago

Some Perspective and Experience While i was in China. I couldn't set up my WePay in time, so like the Author, I had to use Cash. And from my experience between a Tier 2 City and Tier 1 City like Shanghai, it is actually those Tier 2-3 City refuse to accept cash. They thought Cash were cumbersome. And Shanghai may be more welcoming cash / Credit Cards for variety of reasons ( Likely privacy ). I tried to buy breakfast for $2, ~20 cents in USD, i didn't have WePay so I paid in cash. The Shop owner said she didn't have any changes and decide to give me the meal for free. Over the 15 days, I kept thinking about QR code as Tech. Trust me, it is crap. I dont believe there is that much time difference holding up the queue as noted in the article. You have to Open up WeChat, and let each other scan, input your payment by youself, show them you have paid. To me this is very backwards. Octopus in Hong Kong, Scuria in Japan, Oyster Card in London Transport, Offline Mobile Payment from Master Card and Visa, All these are 10x better in UX. The merchants input my bill, I beep. That is it. Then suddenly one day it clicked, and I knew why QR Code succeed. With NFC or any other Wireless payment, you need something, a electronics, a beacon or what ever for sellers to work. With QR Code, They "Print" a QR Code and laminated it. And you can photocopy as many pieces as you want. The barrier of entry for QR Code is so low every one could use it. At the expense of consumer UX. And then weeks after I visited China, Apple announced in WWDC, iOS 11 will come with Auto opening QR Code in Camera mode. That, may have just made the friction of using QR Code much more bearable for me. And it is likely both tech will exist side by side in the long future. I cant see QR Code as it is used today ever getting replaced by the more expensive NFC solution, and NFC will likely stay in transport and other areas.

rsync 9y ago
"With QR Code, They "Print" a QR Code and laminated it." Can someone give me an example of what a merchant would encode into the QR Code that would then allow them to receive money ? Is it a URL ?
- lnanek2 9y ago
  It's a URL, but just one used to open an app with some data. E.g.: http://iosdevelopertips.com/cocoa/launching-your-own-application-via-a-custom-url-scheme.html http://iosdevelopertips.com/cocoa/launching-your-own-applica... And the merchant doesn't know this. Their setup process is typically: Open up WeChat, login, click the plus in the top right corner, pick Money, click receive money... And of course paying and receiving is much easier once everything is setup.

diefunction 9y ago

The point is, you dont need to take a card, you can pay eveywhere, all you need to bring is your phone. Nobody thinks bringing a phone, a wallet and keychain everywhere is quite painful ??? i would rather to use my phone to open my door.