13 ms·

In this interview with Stephen A. Orlins, Kai-Fu Lee explains the value proposition of Alipay https://www.ncuscr.org/media/podcast/uschinainsights/kai-fu-lee-f

In this interview with Stephen A. Orlins, Kai-Fu Lee explains the value proposition of Alipay https://www.ncuscr.org/media/podcast/uschinainsights/kai-fu-lee-future-ai-united-states-china https://www.ncuscr.org/media/podcast/uschinainsights/kai-fu-... Orlins: You focus a lot on, kind of Alipay or WeChat Pay. How does that change the landscape for AI in China versus the United States, where we still are heavily reliant on a credit card system that seems quite old and outdated when you're in China? Lee: It's a very unique opportunity for China to leapfrog. The U.S. had the world's most leading transaction tool, which was the credit card, but it became outdated. It charges too much, it's inconvenient, it's only customer to merchant. In China, with WeChat and Alipay, anybody can pay anybody. We can do micro payments and there are no fees, almost no fees, so the 2% extra charge is almost like a tax on the American economy charged by the credit cards. But with respect to AI, now everybody, including WeChat and Alibaba, but also, if you build an app, you know who your customers are, and what they paid and why. And if you're a retail shop and people scanned you, you know who pays you and why. There are even beggars in the street holding up a sign, "Scan me and give me money," and they know who paid them and why. So I think this is creating a huge amount of data that will help AI.

gruez 6y ago
>It charges too much, [...] so the 2% extra charge is almost like a tax on the American economy charged by the credit cards. they seem to have forgotten about europe where they have the same credit card networks, but capped interchange fees to around 0.3%. >[...] So I think this is creating a huge amount of data that will help AI. This already happens to an extent in the US. Your credit card transactions are sold to data brokers for analytics/market research purposes.
- wombatmobile 6y ago
  > This already happens to an extent in the US. Your credit card transactions are sold to data brokers for analytics/market research purposes. To an extent. US cc transaction data are batched. Alipay provides more agile context by integrating location data real time.
  - gruez 6y ago
    >US cc transaction data are batched to what extent? They might take a few days to settle, but the authorizations show up in my bank almost immediately. For all intents and purposes they're real time. >Alipay provides more agile context by integrating location data real time. The usefulness of this is questionable. Merchant terminals are mostly fixed, so correlating a merchant id/name to a physical location isn't too hard. Apple pay already has this, where it will show a map of where the transaction happened if you click into a transaction. This works even without location services enabled on your phone.
    - wombatmobile 6y ago
      Think bigger. Think 600 million integrated surveillance cameras. Think every aspect of consumer behaviour, pre and post every sale of every magnitude and every configuration, being fed through AI sieves every moment of every day, everywhere.
      - SiempreViernes 6y ago
        Arguably the big improvement in data coverage is at the small scale retailers, big chains have already spent the time and money need to investigate customer behaviour in that sort of detail.
  - mehrdadn 6y ago
    If by batching you mean aggregated (as opposed to delayed), it seems like a matter of time before more merchants start providing L3 data...
  - ulfw 6y ago
    As does Apple Pay (see Apple Card that displays your store/location of purchase).
- abstractbarista 6y ago
  The merchant fee sucks for poor people because businesses likely raise margins to cover it (if they see significant volume via credit cards, like grocery stores). Every transaction I make nets me 2-5% 'cashback'. Great for me since I get 5% back even on things like my electric bill and Internet. But for everyone else paying cash at places where credit is primarily received, they're basically being fined for my benefit.
  - rfoo 6y ago
    An interesting fact is in China even traditional credit cards have significantly lower fee. UnionPay only charges around 0.6%. Not comparable to Alipay or WeChat Pay's effectively 0% but still.
    - an_opabinia 6y ago
      Do American consumers spend a lot more money on American credit cards than European consumers spend on European cards? Obviously I think the fees are pointless.
      - MacsHeadroom 6y ago
        As an American, the only thing I don't spend on a credit card is rent (because my landlord doesn't accept it). It's silly not to pay for everything on credit cards here, when you can get 3-5% back on anything with the right card. That's around $4k/year if you spend $100k before even accounting for doubling on some cards and other benefits like travel vouchers, Uber credits, and free insurance coverage. (Minus a $600-$1000 a year in annual card fees for high end cards.)
        jjeaff 6y ago
        You aren't getting 3-5% cash back unless you are using tons of different cards for different types of purchases and are also keeping within limits. There used to be a 3% cashback on everything card with no limit. Now 2% is the best and difficult for most people to get. You can get 5% credit back with an Amazon Prime card but only on Amazon. Most other 3% or more back are either limited to a niche category and/or capped. (Like 6% back on groceries, but only for the first $6k).
- mchusma 6y ago
  The 2% tax is IMO the easiest problem to see and fix in the american financial system.
  - lotsofpulp 6y ago
    As far as I can tell, there isn't much political will to fix it. Merchants already have the freedom to offer lower prices, and some do for paying with cash/debit. But for the most part, I think merchants are betting that people will spend more with credit cards. Similarly, consumers also like the cash back/rewards game. Plus there are benefits to having an arbiter when dealing with an unknown party in a transaction.
    - justicezyx 6y ago
      I thought Democratic countries are designed to let the people fixing their own problem? Funny people nowadays mentioning "political will", somehow this reminds me how domesticated Chinese people think about changing society: don't bother, the government does not want to do that... Truly sad...
- cooliosis 6y ago
  I think it's because the question asked about US vs China
wil421 6y ago
Why would I want to give up my various credit/debit cards and use a single app? I would be giving a single app all the payment power. This works well in a highly regulated Government controlled market. The EU and US allow anyone to compete. China does not. A better and more realistic solution in the US is the personal bank to bank transfers people can easily do in the UK/EU.
- dmurray 6y ago
  There are two major credit card networks and essentially 0 new entrants in that space. Your "various credit/debit cards" are most likely with the same two networks, linked to different bank accounts, just as they could be with Alipay. They just have different branding. Two is a lot more than one, for competition purposes, but it's hardly a wide open market where "anyone can compete", and it's the same as the number of major consumer payment networks in China (Alipay and Wechat pay).
  - wil421 6y ago
    There are actually 4. Visa, MasterCard, Amex, and Discover. Yes and I make about $1500-$2000 in cash back a year using my various branded credit cards. How can you do that with Alipay? Does Alipay offer theft protection, travel insurance, or price protection for buyers? My Amex and Chase cards do. What about disputes and fraud on Alipay?
    - Spearchucker 6y ago
      Are these cashbacks truly gifted to you though, or is the price of another product or service from the provider simply adjusted to compensate? Like Black Friday discounts, where product prices are raised so that the "discount" only drives sales volume, rather than offer a truly marked-down/discounted price to the consumer.
      - mdorazio 6y ago
        It’s even worse. A significant portion of cash back/rewards are financed from fees and interest payments charged to other credit card holders. So in effect, you’re getting money from poorer and/or less responsible people who carry balances and use their cards to get cash advances.
piokoch 6y ago
I am not sure if I share Mr. Lee's enthusiasm about this massive spending control in the hands of a single company and the government that routinely puts people in concentration camps. Also helping some AI is also not on my list of life priorities, delicately speaking.
hesarenu 6y ago
So similar to India's UPI?
dicomdan 6y ago
You can send money for free P2P with a myriad of services in the US. Credit cards serve a different purpose.
nine_k 6y ago
The fun thing is that you have a number of ways to pay electronically in the US, PayPal and Venmo are pretty widespread. What is missing is an effortless way of asking to pay, like by scanning a QR code. Contactless payments using NFC in cards and phones do not quite cut it, and require a terminal.
- baxtr 6y ago
  What about PayPal? I think they provide a unique link
  - nine_k 6y ago
    Yes, they have everything in place, except the zero-effort contactless payment feature, a way to show or export / print a QR code. Paypal.me works great on the web as a clickable link, even though the commission is several percent (don't remember exactly), not the 0.3% which Alipay boasts.
- smachiz 6y ago
  How is QR any different than NFC from a user perspective? Both require a terminal to be effortless for the consumer (an LCD or e-ink display that shows a real time QR with transaction details like amount, or an NFC chip that does the same thing). I think QR is slightly worse since I have to open my camera app, or open my payment app and select camera, vs just waving my watch/phone at a terminal. Things like metro payments are 100% doable with NFC and would be an awful nightmare with QR.
  - bmitc 6y ago
    Using WeChat or Alipay in China does not require anything other than the app, which is quickly opened. Merchants just have pieces of paper with their QR code on them, and the payment is nearly instant. NFC is extremely finicky and much slower. I don’t know how many times I’ve seen lines held up by people needing to wave their phone or credit card around to get the NFC recognition to work. As someone who has visited China, it truly feels like stepping back in time when coming to the U.S. with regards to payments.
dmos62 6y ago
I understand that we're talking about feeding "AI" data here, so it's kind of moot, but I'd like to point out anyway that most of us don't want the merchants to know who we are (or to feed the "AI" in general).
- rmah 6y ago
  It may surprise some folks here on HN, but in the real world, the vast majority of people don't care if merchants "know who they are". I'd bet that there are more people want merchants to know who they are than there are people who explicitly don't want them to know. But that said, the vast majority simply don't care. Just my opinion, of course.
  - hn_throwaway_99 6y ago
    I think it's more like "the vast majority simply don't care, until they do". That is, I think most people think "Who cares if merchant XYZ knows I changed my shampoo brand", but when people are actually shown the full set of data that is known about them, and how that data is correlated with with tons of other data sources, and that data is used to make fairly accurate predictions about your behavior which affects what products and services are promoted to you, that's when your average person goes "holy shit!" Right now it's just "out of sight, out of mind" and the full capabilities of what is possible with aggregated data is just not apparent to your average person.
    - Barrin92 6y ago
      meh, people here in Germany are privacy focused as hell and even here nobody cares for more than five minutes when some data scandal breaks, of which we have at least one every year now. AI, surveillance capitalism, manipulation and so on have been in pop-culture and news for years now, 'the social dilemma' just aired on netflix and a lot of people seem to have watched it, there's a documentary about 'big data' on TV every month, every other sci-fi movie has it as a plot point, we're all aware of it. People are genuinely indifferent about it. People will complain about it in theoretic debates but the number of people who actually delete the apps off their phone is basically zero, which tells you what you need to know.
nirui 6y ago
Lee is a smart guy. But I think his missed one important point: It's not about fees. No it's not even about easy to use. In China, technically anyone can setup a "business" account on Alipay with just one tap and then start to collect payment right way, the story is completely different if you have to deal with banks. Then with all that, you add the fact that not everybody here uses credit card which raises the bar for credit card adaption up yet again. I'd recommend people who interested about the related development to checkout the DC/EP project. Which is aimed to be an alternative to Alipay and WeChat Pay, but backed by the banks.
- jariel 6y ago
  It's definitely about the fees and underlying structures. No economy is 'suffering' because businesses have to 'deal with a bank'. It could be smoother, but it's mostly not a big deal. Since the world has 'gone digital' the '2%' system setup became the natural medium and it's possibly a bigger problem than Google and FB, it's just that nobody wants to talk about it.
  - erichocean 6y ago
    > No economy is 'suffering' because businesses have to 'deal with a bank'. So, what was the market opportunity Stripe exploited if not that "dealing with banks" is painful?
    - jariel 6y ago
      First, Stripe, despite it's mega valuation, is small peanuts. They are just a part of something much bigger, and they are not really enabling new markets. Second, they didn't invent anything new, they just made the process a easier. There are plenty of non-Stripe solutions you can use today. To a teenage software developer without business exposure or experience, who thinks 'opening a merchant account' is a big deal, or that 'incorporating' is a big deal, Stripe seems like some kind of magic. But none of that is hard. People do it all the time. Your plumber, hairdresser and local cafe probably have some kind of incorporation and collect/pay a VAT and business tax. It's not rocket science. You can usually do it online in a few minutes. 'Dealing with banks' is not a problem with scale. 2% of every transaction however, and the underlying power structures that want to keep it that way ... that's a problem.
01100011 6y ago
Do WeChat Pay or AliPay offer payment protection and dispute resolution?
neves 6y ago
The 2% is a tax in the world economy that goes to America. And in a lot of countries, the credit card companies cartel charges a lot more of 2%
- Cu3PO42 6y ago
  The credit card fees are made up of multiple smaller fees: the largest part, the interchange fee goes to the issuing bank wherever it is in the world. The scheme fee goes to the scheme (e.g. Visa, MasterCard, ...) which is indeed ultimately a fee that goes to America, however it is much lower than 2%.
  - neves 6y ago
    Sure, but if you buy a chocolate in Kenya, part of the money goes to the US.
    - Cu3PO42 6y ago
      Yes, and I'm not saying that's a good thing, but I do think it's important to stay factual in complaints. However another massive issue except the fees is data flow. I don't need US corporations to know about all my transactions that otherwise do not relate to them at all. It should be in the interest of all countries to have a payment scheme that is not reliant on the US or another massive foreign power. Thankfully, many countries do have their own scheme, though it seems Kenya unfortunately doesn't.
jorblumesea 6y ago
Venmo, Paypal and other forms of digital payment are extremely popular. It's not as ubiquitous as WeChat but it's not some unknown quantity. The US has a hybrid system with mixed credit card and digital pay systems.
x87678r 6y ago
One thing is how can this be a $300B company if there are tiny fees?
- valuearb 6y ago
  Because Wall Street sells junk like this to suck, er, retail investors and tells them financials don’t matter.
  - sangnoir 6y ago
    Wall Street has little to do with this listing, which was unimaginable 5 years ago, as Jack Ma noted.
    - valuearb 6y ago
      You are correct. I was wrong in using Wall Street as a generic term for investment bankers when this is a record and ground breaking offering on Shanghai and Hong Kong exchanges. Still it’s being priced by Chinese bankers at such a ridiculous level that it is almost certain to work out very poorly for buyers.
- wombatmobile 6y ago
  You might similarly ask how Alphabet can be a $1 trillion company when it charges no fees for google search, maps, or Android.
- blackrock 6y ago
  By massive volume? Or by targeted ads, since the company has an idea of what you buy. And your phone is just a convenient personalized billboard in your pocket.
trophycase 6y ago
They are both middlemen. If Alipay is more profitable than Visa, they are extracting even more rent and thus "taxing the economy" even more heavily.
goatinaboat 6y ago
In China, with WeChat and Alipay, anybody can pay anybody. We can do micro payments and there are no fees If you aren’t paying, then you are the product.
- BizyDev 6y ago
  The point is that with Visa/Master Card you're the product and you pay for it. FYI They both sell your data to brokers.
peacefulhat 6y ago
Haven't used Alipay but Wechat is really annoying because they get your Wechat contact info and text you ads. Other than that, yeah it blows away US payment system. Amazon Go store has potential to get us back on top, though.
valuearb 6y ago
Thus us how the street sells garbage to retail investors. Focus on strategy, product, benefits, etc, anything other than actual financials.

gruez 6y ago

>It charges too much, [...] so the 2% extra charge is almost like a tax on the American economy charged by the credit cards. they seem to have forgotten about europe where they have the same credit card networks, but capped interchange fees to around 0.3%. >[...] So I think this is creating a huge amount of data that will help AI. This already happens to an extent in the US. Your credit card transactions are sold to data brokers for analytics/market research purposes.

wombatmobile 6y ago
> This already happens to an extent in the US. Your credit card transactions are sold to data brokers for analytics/market research purposes. To an extent. US cc transaction data are batched. Alipay provides more agile context by integrating location data real time.
- gruez 6y ago
  >US cc transaction data are batched to what extent? They might take a few days to settle, but the authorizations show up in my bank almost immediately. For all intents and purposes they're real time. >Alipay provides more agile context by integrating location data real time. The usefulness of this is questionable. Merchant terminals are mostly fixed, so correlating a merchant id/name to a physical location isn't too hard. Apple pay already has this, where it will show a map of where the transaction happened if you click into a transaction. This works even without location services enabled on your phone.
  - wombatmobile 6y ago
    Think bigger. Think 600 million integrated surveillance cameras. Think every aspect of consumer behaviour, pre and post every sale of every magnitude and every configuration, being fed through AI sieves every moment of every day, everywhere.
    - SiempreViernes 6y ago
      Arguably the big improvement in data coverage is at the small scale retailers, big chains have already spent the time and money need to investigate customer behaviour in that sort of detail.
- mehrdadn 6y ago
  If by batching you mean aggregated (as opposed to delayed), it seems like a matter of time before more merchants start providing L3 data...
- ulfw 6y ago
  As does Apple Pay (see Apple Card that displays your store/location of purchase).
abstractbarista 6y ago
The merchant fee sucks for poor people because businesses likely raise margins to cover it (if they see significant volume via credit cards, like grocery stores). Every transaction I make nets me 2-5% 'cashback'. Great for me since I get 5% back even on things like my electric bill and Internet. But for everyone else paying cash at places where credit is primarily received, they're basically being fined for my benefit.
- rfoo 6y ago
  An interesting fact is in China even traditional credit cards have significantly lower fee. UnionPay only charges around 0.6%. Not comparable to Alipay or WeChat Pay's effectively 0% but still.
  - an_opabinia 6y ago
    Do American consumers spend a lot more money on American credit cards than European consumers spend on European cards? Obviously I think the fees are pointless.
    - MacsHeadroom 6y ago
      As an American, the only thing I don't spend on a credit card is rent (because my landlord doesn't accept it). It's silly not to pay for everything on credit cards here, when you can get 3-5% back on anything with the right card. That's around $4k/year if you spend $100k before even accounting for doubling on some cards and other benefits like travel vouchers, Uber credits, and free insurance coverage. (Minus a $600-$1000 a year in annual card fees for high end cards.)
      - jjeaff 6y ago
        You aren't getting 3-5% cash back unless you are using tons of different cards for different types of purchases and are also keeping within limits. There used to be a 3% cashback on everything card with no limit. Now 2% is the best and difficult for most people to get. You can get 5% credit back with an Amazon Prime card but only on Amazon. Most other 3% or more back are either limited to a niche category and/or capped. (Like 6% back on groceries, but only for the first $6k).
mchusma 6y ago
The 2% tax is IMO the easiest problem to see and fix in the american financial system.
- lotsofpulp 6y ago
  As far as I can tell, there isn't much political will to fix it. Merchants already have the freedom to offer lower prices, and some do for paying with cash/debit. But for the most part, I think merchants are betting that people will spend more with credit cards. Similarly, consumers also like the cash back/rewards game. Plus there are benefits to having an arbiter when dealing with an unknown party in a transaction.
  - justicezyx 6y ago
    I thought Democratic countries are designed to let the people fixing their own problem? Funny people nowadays mentioning "political will", somehow this reminds me how domesticated Chinese people think about changing society: don't bother, the government does not want to do that... Truly sad...
cooliosis 6y ago
I think it's because the question asked about US vs China

wil421 6y ago

Why would I want to give up my various credit/debit cards and use a single app? I would be giving a single app all the payment power. This works well in a highly regulated Government controlled market. The EU and US allow anyone to compete. China does not. A better and more realistic solution in the US is the personal bank to bank transfers people can easily do in the UK/EU.

dmurray 6y ago
There are two major credit card networks and essentially 0 new entrants in that space. Your "various credit/debit cards" are most likely with the same two networks, linked to different bank accounts, just as they could be with Alipay. They just have different branding. Two is a lot more than one, for competition purposes, but it's hardly a wide open market where "anyone can compete", and it's the same as the number of major consumer payment networks in China (Alipay and Wechat pay).
- wil421 6y ago
  There are actually 4. Visa, MasterCard, Amex, and Discover. Yes and I make about $1500-$2000 in cash back a year using my various branded credit cards. How can you do that with Alipay? Does Alipay offer theft protection, travel insurance, or price protection for buyers? My Amex and Chase cards do. What about disputes and fraud on Alipay?
  - Spearchucker 6y ago
    Are these cashbacks truly gifted to you though, or is the price of another product or service from the provider simply adjusted to compensate? Like Black Friday discounts, where product prices are raised so that the "discount" only drives sales volume, rather than offer a truly marked-down/discounted price to the consumer.
    - mdorazio 6y ago
      It’s even worse. A significant portion of cash back/rewards are financed from fees and interest payments charged to other credit card holders. So in effect, you’re getting money from poorer and/or less responsible people who carry balances and use their cards to get cash advances.

piokoch 6y ago

I am not sure if I share Mr. Lee's enthusiasm about this massive spending control in the hands of a single company and the government that routinely puts people in concentration camps. Also helping some AI is also not on my list of life priorities, delicately speaking.

hesarenu 6y ago

So similar to India's UPI?

dicomdan 6y ago

You can send money for free P2P with a myriad of services in the US. Credit cards serve a different purpose.

nine_k 6y ago

The fun thing is that you have a number of ways to pay electronically in the US, PayPal and Venmo are pretty widespread. What is missing is an effortless way of asking to pay, like by scanning a QR code. Contactless payments using NFC in cards and phones do not quite cut it, and require a terminal.

baxtr 6y ago
What about PayPal? I think they provide a unique link
- nine_k 6y ago
  Yes, they have everything in place, except the zero-effort contactless payment feature, a way to show or export / print a QR code. Paypal.me works great on the web as a clickable link, even though the commission is several percent (don't remember exactly), not the 0.3% which Alipay boasts.
smachiz 6y ago
How is QR any different than NFC from a user perspective? Both require a terminal to be effortless for the consumer (an LCD or e-ink display that shows a real time QR with transaction details like amount, or an NFC chip that does the same thing). I think QR is slightly worse since I have to open my camera app, or open my payment app and select camera, vs just waving my watch/phone at a terminal. Things like metro payments are 100% doable with NFC and would be an awful nightmare with QR.
- bmitc 6y ago
  Using WeChat or Alipay in China does not require anything other than the app, which is quickly opened. Merchants just have pieces of paper with their QR code on them, and the payment is nearly instant. NFC is extremely finicky and much slower. I don’t know how many times I’ve seen lines held up by people needing to wave their phone or credit card around to get the NFC recognition to work. As someone who has visited China, it truly feels like stepping back in time when coming to the U.S. with regards to payments.

dmos62 6y ago

I understand that we're talking about feeding "AI" data here, so it's kind of moot, but I'd like to point out anyway that most of us don't want the merchants to know who we are (or to feed the "AI" in general).

rmah 6y ago
It may surprise some folks here on HN, but in the real world, the vast majority of people don't care if merchants "know who they are". I'd bet that there are more people want merchants to know who they are than there are people who explicitly don't want them to know. But that said, the vast majority simply don't care. Just my opinion, of course.
- hn_throwaway_99 6y ago
  I think it's more like "the vast majority simply don't care, until they do". That is, I think most people think "Who cares if merchant XYZ knows I changed my shampoo brand", but when people are actually shown the full set of data that is known about them, and how that data is correlated with with tons of other data sources, and that data is used to make fairly accurate predictions about your behavior which affects what products and services are promoted to you, that's when your average person goes "holy shit!" Right now it's just "out of sight, out of mind" and the full capabilities of what is possible with aggregated data is just not apparent to your average person.
  - Barrin92 6y ago
    meh, people here in Germany are privacy focused as hell and even here nobody cares for more than five minutes when some data scandal breaks, of which we have at least one every year now. AI, surveillance capitalism, manipulation and so on have been in pop-culture and news for years now, 'the social dilemma' just aired on netflix and a lot of people seem to have watched it, there's a documentary about 'big data' on TV every month, every other sci-fi movie has it as a plot point, we're all aware of it. People are genuinely indifferent about it. People will complain about it in theoretic debates but the number of people who actually delete the apps off their phone is basically zero, which tells you what you need to know.

nirui 6y ago

Lee is a smart guy. But I think his missed one important point: It's not about fees. No it's not even about easy to use. In China, technically anyone can setup a "business" account on Alipay with just one tap and then start to collect payment right way, the story is completely different if you have to deal with banks. Then with all that, you add the fact that not everybody here uses credit card which raises the bar for credit card adaption up yet again. I'd recommend people who interested about the related development to checkout the DC/EP project. Which is aimed to be an alternative to Alipay and WeChat Pay, but backed by the banks.

jariel 6y ago
It's definitely about the fees and underlying structures. No economy is 'suffering' because businesses have to 'deal with a bank'. It could be smoother, but it's mostly not a big deal. Since the world has 'gone digital' the '2%' system setup became the natural medium and it's possibly a bigger problem than Google and FB, it's just that nobody wants to talk about it.
- erichocean 6y ago
  > No economy is 'suffering' because businesses have to 'deal with a bank'. So, what was the market opportunity Stripe exploited if not that "dealing with banks" is painful?
  - jariel 6y ago
    First, Stripe, despite it's mega valuation, is small peanuts. They are just a part of something much bigger, and they are not really enabling new markets. Second, they didn't invent anything new, they just made the process a easier. There are plenty of non-Stripe solutions you can use today. To a teenage software developer without business exposure or experience, who thinks 'opening a merchant account' is a big deal, or that 'incorporating' is a big deal, Stripe seems like some kind of magic. But none of that is hard. People do it all the time. Your plumber, hairdresser and local cafe probably have some kind of incorporation and collect/pay a VAT and business tax. It's not rocket science. You can usually do it online in a few minutes. 'Dealing with banks' is not a problem with scale. 2% of every transaction however, and the underlying power structures that want to keep it that way ... that's a problem.

01100011 6y ago

Do WeChat Pay or AliPay offer payment protection and dispute resolution?

neves 6y ago

The 2% is a tax in the world economy that goes to America. And in a lot of countries, the credit card companies cartel charges a lot more of 2%

Cu3PO42 6y ago
The credit card fees are made up of multiple smaller fees: the largest part, the interchange fee goes to the issuing bank wherever it is in the world. The scheme fee goes to the scheme (e.g. Visa, MasterCard, ...) which is indeed ultimately a fee that goes to America, however it is much lower than 2%.
- neves 6y ago
  Sure, but if you buy a chocolate in Kenya, part of the money goes to the US.
  - Cu3PO42 6y ago
    Yes, and I'm not saying that's a good thing, but I do think it's important to stay factual in complaints. However another massive issue except the fees is data flow. I don't need US corporations to know about all my transactions that otherwise do not relate to them at all. It should be in the interest of all countries to have a payment scheme that is not reliant on the US or another massive foreign power. Thankfully, many countries do have their own scheme, though it seems Kenya unfortunately doesn't.

jorblumesea 6y ago

Venmo, Paypal and other forms of digital payment are extremely popular. It's not as ubiquitous as WeChat but it's not some unknown quantity. The US has a hybrid system with mixed credit card and digital pay systems.

x87678r 6y ago

One thing is how can this be a $300B company if there are tiny fees?

valuearb 6y ago
Because Wall Street sells junk like this to suck, er, retail investors and tells them financials don’t matter.
- sangnoir 6y ago
  Wall Street has little to do with this listing, which was unimaginable 5 years ago, as Jack Ma noted.
  - valuearb 6y ago
    You are correct. I was wrong in using Wall Street as a generic term for investment bankers when this is a record and ground breaking offering on Shanghai and Hong Kong exchanges. Still it’s being priced by Chinese bankers at such a ridiculous level that it is almost certain to work out very poorly for buyers.
wombatmobile 6y ago
You might similarly ask how Alphabet can be a $1 trillion company when it charges no fees for google search, maps, or Android.
blackrock 6y ago
By massive volume? Or by targeted ads, since the company has an idea of what you buy. And your phone is just a convenient personalized billboard in your pocket.

trophycase 6y ago

They are both middlemen. If Alipay is more profitable than Visa, they are extracting even more rent and thus "taxing the economy" even more heavily.

goatinaboat 6y ago

In China, with WeChat and Alipay, anybody can pay anybody. We can do micro payments and there are no fees If you aren’t paying, then you are the product.

BizyDev 6y ago
The point is that with Visa/Master Card you're the product and you pay for it. FYI They both sell your data to brokers.

peacefulhat 6y ago

Haven't used Alipay but Wechat is really annoying because they get your Wechat contact info and text you ads. Other than that, yeah it blows away US payment system. Amazon Go store has potential to get us back on top, though.

valuearb 6y ago

Thus us how the street sells garbage to retail investors. Focus on strategy, product, benefits, etc, anything other than actual financials.