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.
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.
I live in NYC, and most stores seem to have $5-10 credit card minimums.
America needs to admit that it's no longer the bastion of innovation that it once was (I say this as an American. If anyone doesn't believe me, just take a trip to East Asia). Americans are complacent and fine with not having the cutting edge (not to mention our failing infrastructure).
I wish there was a way to change this attitude, but it feels like most people are too busy working and paying off their student debt. If every American had to fly to Tokyo or Seoul for a week, I think we'd put up less with our failing infrastructure. Or maybe this "Everyone for themselves, it's someone else's problem" greed mindset is too ingrained in our DNA.
I don't see it as a class thing but it certainly is a culture thing. When the American's go to build their app, you get something out of silicon valley that is almost built for the programmers. It will use hardware that requires everyone to buy a new phone (like NFC). Things like QR codes would be derided as insecure and exploitable. It will comply with consumer protections.
In China the app will be made chabudao (good enough). It will use QR codes because its fast and its what your coder knows and its whats on everyones phone. Security exploit? Shenme? Consumer protections? How do I say "caveat emptor" in Chinese?
There's something to be said for the Chinese approach. By making something stupid, they've made something smart. Not all innovation requires technical accomplishment.
Edit: after thought. Credit where its due to alipay and wechat. The QR-code works even when my phone is temporarily without a connection. I don't know what goes on in the background, but it def saved me a few times from looking like an idiot with no way to pay for something.
Another point about dumb being smart. Alipay does have a sound based transaction system (like what crinkle tried to do). AFAIK no one ever uses it. The plain old dumb QR code is faster and better understood and is therefore better.
> In China however, they throw away that pride of creating the greatest and shiniest.
Why is it every time china is discussed, people have to repeat the same trite false things.
China is a developing nation. Developing nations don't create the "greatest and shiniest" things. The US didn't create the greatest and shiniest things when we were developing. Germany didn't create the greatest and shiniest things when they were developing. The same thing with Japan. The same thing with Korea.
There was a time when american goods were considered shoddy and poor quality. There was a time when german goods were considered low-end. Japanese goods were mocked for being low quality. Korean goods the same.
>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.
Right. Because in the US we can't vote with our wallets.
Your point is slightly undermined however in that China didn't build any of this. Their "inferior" product, and even the big current one (WeChat) is all based on technology pioneered by other countries.
While we were putting together the first apps, China was still by an large a poverty-ridden manufacturing-exclusive economy, Hong Kong being the exception. It's only in the last 25 years or so that they've finally opened up and started really growing, and when they did, all of this technology was already more or less proven and available for them to use.
The real test will be the next 50 years or so, when these various systems will need to be upgraded to see if they can keep the same pace and keep everything exactly as, for lack of a better term, shiny. :) So far they've done well, I hope they continue to do so.
It's also worth noting: All that's been accomplished could have been accomplished without the Chinese central planners too; the real problem for America and countries like us is the crony capitalism, not the lack of central planning.
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.
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.
Yeah, it is hard to overstate just how easy it is to use a credit card in the US.
I have only managed to use Android Pay a couple of times and the store that I did that with has removed it since then.
When it works, it is approximately the same level of annoyance as a credit card. When it fails, it is so much worse. I just don't see it taking off here in its current form.
I think you're right that this is the dynamic at play here. It is similar to the dynamic by which many regions have leapfrogged landline telephones, skipping the older more infrastructure/capital intensive version of technology.
The developed economies were already mostly "cashless." Very little cash has run though most malls, hospitals, schools or even supermarkets for decades already. "We hqave something good enough" is definitely at play.
That said, we need to keep in mind that financial transactions has been close to an airtight oligopoly for a long while. 2 CC companies have run the show for decades. They have very deep "moats" with spikes and crocodiles. One of the big one is the strict regulation, which heavily favours established incumbents.
It's yet to be seen whether China (+India, etc.) will develop a dynamic market for financial services in their cashless economies, once the dominant services become established and entrenched.
> as opposed to cash, which is much slower with people counting out amounts and cashiers counting out change
I can't really let that comment stand. Cash transactions go way faster than credit card transactions in my experience. (They'd go faster still if prices were posted with tax included, but that's a different issue.) Hand over the card, swipe the card, hand back the card, wait for the receipt to print, get a pen, sign the receipt, hand that back VS Hand over the money, count the change, hand that back.
Don't get me wrong, I can imagine how credit card interactions should be able to go faster. But in practice, they don't. If anything, they've gotten worse lately, since the chip cards take a while to do their processing (and then you still need to sign the stupid LCD screen with the terrible stylus).
I am pretty disappointed at the lack of locations accepting Android Pay. I was hoping to ditch my wallet but can pretty much only use it at the gas station, Subway, and Walgreens.
> 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
Mobile payments haven't taken off in the US because the big players are all fighting to the death in the space.
I suspect that the space was equally as fractured until the big players in China simply got the "Party Blessing" and that was the end of the discussion.
In some countries (I've seen it in Canada and Sweden) there are machines that deal with the change for you (this is separate from a self-check out machine). They either deal with just the coins or with notes+coins, without any cashier interference
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.
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.
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.
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.
when I go to pubs/restaurants with friends in Shanghai, one of us would be using AliPay to pay for the whole bill, then he/she would be using AliPay's "AA Pay" feature to show the QR code to get money from everyone. I guess your paywave card won't help you on that.
shared bike is extremely popular these days, it costs you $10c for a one hour ride. paywave card is useless for such innovative products - the amount of each transaction is too small, plus you don't want to see a card reader on each bike as there are 10 million such bikes now.
EFTPOS style devices were popular in China, the quarterly statement from Chinese central bank shows that around 6 billion debit cards and half billion credit cards were issued in total.
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.
I'm still puzzled about why lost cards aren't more of an issue with paywave. Does the bank always refund the losses? If so, what's to stop you spending money for a week and then claiming to the bank that none of the transactions were yours?
I'd assume the fee for receiving funds through WeChat QR is significantly lower than the transaction fee for paypass in Australia, which might explain why so many stores have a minimum for card.
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.
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.
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.
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.
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.
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.
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
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)?
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.
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.
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.
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."
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
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 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.... ).
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:
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.
[+] [-] thablackbull|8 years ago|reply
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|8 years ago|reply
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.
[+] [-] RealityNow|8 years ago|reply
America needs to admit that it's no longer the bastion of innovation that it once was (I say this as an American. If anyone doesn't believe me, just take a trip to East Asia). Americans are complacent and fine with not having the cutting edge (not to mention our failing infrastructure).
I wish there was a way to change this attitude, but it feels like most people are too busy working and paying off their student debt. If every American had to fly to Tokyo or Seoul for a week, I think we'd put up less with our failing infrastructure. Or maybe this "Everyone for themselves, it's someone else's problem" greed mindset is too ingrained in our DNA.
[+] [-] IIAOPSW|8 years ago|reply
In China the app will be made chabudao (good enough). It will use QR codes because its fast and its what your coder knows and its whats on everyones phone. Security exploit? Shenme? Consumer protections? How do I say "caveat emptor" in Chinese?
There's something to be said for the Chinese approach. By making something stupid, they've made something smart. Not all innovation requires technical accomplishment.
Edit: after thought. Credit where its due to alipay and wechat. The QR-code works even when my phone is temporarily without a connection. I don't know what goes on in the background, but it def saved me a few times from looking like an idiot with no way to pay for something.
Another point about dumb being smart. Alipay does have a sound based transaction system (like what crinkle tried to do). AFAIK no one ever uses it. The plain old dumb QR code is faster and better understood and is therefore better.
[+] [-] kobeya|8 years ago|reply
Except the rampant nepotism and outright corruption that means the same oligarchy controls the future of tech there too?
[+] [-] awkwarddaturtle|8 years ago|reply
Why is it every time china is discussed, people have to repeat the same trite false things.
China is a developing nation. Developing nations don't create the "greatest and shiniest" things. The US didn't create the greatest and shiniest things when we were developing. Germany didn't create the greatest and shiniest things when they were developing. The same thing with Japan. The same thing with Korea.
There was a time when american goods were considered shoddy and poor quality. There was a time when german goods were considered low-end. Japanese goods were mocked for being low quality. Korean goods the same.
>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.
Right. Because in the US we can't vote with our wallets.
[+] [-] coliveira|8 years ago|reply
The last events in the US election system have cast a long shadow of doubt on this statement.
[+] [-] __m|8 years ago|reply
[+] [-] 127|8 years ago|reply
Are you so sure of that? http://www.businessinsider.com/princeton-and-northwestern-st...
[+] [-] FussyZeus|8 years ago|reply
While we were putting together the first apps, China was still by an large a poverty-ridden manufacturing-exclusive economy, Hong Kong being the exception. It's only in the last 25 years or so that they've finally opened up and started really growing, and when they did, all of this technology was already more or less proven and available for them to use.
The real test will be the next 50 years or so, when these various systems will need to be upgraded to see if they can keep the same pace and keep everything exactly as, for lack of a better term, shiny. :) So far they've done well, I hope they continue to do so.
It's also worth noting: All that's been accomplished could have been accomplished without the Chinese central planners too; the real problem for America and countries like us is the crony capitalism, not the lack of central planning.
[+] [-] unknown|8 years ago|reply
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[+] [-] hkmurakami|8 years ago|reply
The market has already been primed for them to engage in a follower strategy.
[+] [-] chrischen|8 years ago|reply
[+] [-] blazespin|8 years ago|reply
[+] [-] hammock|8 years ago|reply
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[+] [-] 9192837193|8 years ago|reply
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[+] [-] hn_throwaway_99|8 years ago|reply
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|8 years ago|reply
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.
[+] [-] _ea1k|8 years ago|reply
I have only managed to use Android Pay a couple of times and the store that I did that with has removed it since then.
When it works, it is approximately the same level of annoyance as a credit card. When it fails, it is so much worse. I just don't see it taking off here in its current form.
[+] [-] netcan|8 years ago|reply
The developed economies were already mostly "cashless." Very little cash has run though most malls, hospitals, schools or even supermarkets for decades already. "We hqave something good enough" is definitely at play.
That said, we need to keep in mind that financial transactions has been close to an airtight oligopoly for a long while. 2 CC companies have run the show for decades. They have very deep "moats" with spikes and crocodiles. One of the big one is the strict regulation, which heavily favours established incumbents.
It's yet to be seen whether China (+India, etc.) will develop a dynamic market for financial services in their cashless economies, once the dominant services become established and entrenched.
[+] [-] blahedo|8 years ago|reply
I can't really let that comment stand. Cash transactions go way faster than credit card transactions in my experience. (They'd go faster still if prices were posted with tax included, but that's a different issue.) Hand over the card, swipe the card, hand back the card, wait for the receipt to print, get a pen, sign the receipt, hand that back VS Hand over the money, count the change, hand that back.
Don't get me wrong, I can imagine how credit card interactions should be able to go faster. But in practice, they don't. If anything, they've gotten worse lately, since the chip cards take a while to do their processing (and then you still need to sign the stupid LCD screen with the terrible stylus).
[+] [-] tunetine|8 years ago|reply
[+] [-] bsder|8 years ago|reply
Mobile payments haven't taken off in the US because the big players are all fighting to the death in the space.
I suspect that the space was equally as fractured until the big players in China simply got the "Party Blessing" and that was the end of the discussion.
[+] [-] raverbashing|8 years ago|reply
In some countries (I've seen it in Canada and Sweden) there are machines that deal with the change for you (this is separate from a self-check out machine). They either deal with just the coins or with notes+coins, without any cashier interference
[+] [-] HeavenFox|8 years ago|reply
- 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.
[+] [-] ksec|8 years ago|reply
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.
[+] [-] ajiang|8 years ago|reply
[+] [-] NamTaf|8 years ago|reply
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.
[+] [-] rahimnathwani|8 years ago|reply
The difference is that anyone can accept WeChat payments, no matter how small their transaction volume.
I haven't been to Australia since 2002, so am a little out of touch. Are there small businesses like fruit stands? Do they take paypass/paywave?
What about buskers?
[+] [-] grecy|8 years ago|reply
It's the same in Canada.
Whenever I go to the US I feel like I'm going backwards in time.
[+] [-] dis-sys|8 years ago|reply
when I go to pubs/restaurants with friends in Shanghai, one of us would be using AliPay to pay for the whole bill, then he/she would be using AliPay's "AA Pay" feature to show the QR code to get money from everyone. I guess your paywave card won't help you on that.
shared bike is extremely popular these days, it costs you $10c for a one hour ride. paywave card is useless for such innovative products - the amount of each transaction is too small, plus you don't want to see a card reader on each bike as there are 10 million such bikes now.
EFTPOS style devices were popular in China, the quarterly statement from Chinese central bank shows that around 6 billion debit cards and half billion credit cards were issued in total.
http://www.pcac.org.cn/file/File/1490069955.pdf
[+] [-] Lxr|8 years ago|reply
[+] [-] unknown|8 years ago|reply
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[+] [-] incompatible|8 years ago|reply
[+] [-] keiwo|8 years ago|reply
[+] [-] hbarka|8 years ago|reply
[+] [-] usaphp|8 years ago|reply
[+] [-] theylon|8 years ago|reply
Oh and yes, When I leave the house I don't even take my wallet, everything is paid using wechat.
[+] [-] itchap|8 years ago|reply
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.
[+] [-] 2muchcoffeeman|8 years ago|reply
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.
[+] [-] justjimmy|8 years ago|reply
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.
[+] [-] EZ-E|8 years ago|reply
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
[+] [-] lucaspiller|8 years ago|reply
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)?
[+] [-] psy-q|8 years ago|reply
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.
[+] [-] williamle8300|8 years ago|reply
[+] [-] foobarian|8 years ago|reply
[+] [-] lostboys67|8 years ago|reply
[+] [-] Animats|8 years ago|reply
That's probably more traction than Google Pay or Apple's payment system ever got.
"Alipay, leader in online payments. 400,000,000 Users."
[+] [-] 1024core|8 years ago|reply
When I heard about it several years ago, it was, effectively, the largest bank in Kenya.
[+] [-] tristanj|8 years ago|reply
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 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.... ).
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
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.