Just one phenomenal example of China doing something wayyy better than the US, is comparing Venmo (plus PayPal) to Chinese payment methods. It’s not even close, if for no other reason than the community of Venmo and PayPal users is much smaller and much less readily available than in China. One, Chinese tend to live off their phones, a statement supported anecdotally and statistically. Two, Americans seem to be much more reluctant to using digital forms of payment in this way.
First: PayPal, the form of payment people unenthusiastically sign up for when they first made an Amazon or E-Bay account. They usually take a cut, people rarely use it, and thus they often forget their password, making them less likely to use it.
Second: Venmo, which actually has a lot of positives. It is vastly easier to connect with all your friends on Venmo than any other Chinese method, as all Facebook friends are you Venmo friends. However, this is true of almost any form of Chinese social media, as they are inherently designed to stifle the spread of information.
(Proof: On WeChat, you cannot share a post; only your friends can see it. This means no posts can go viral unless people are copy-pasting on a large scale. Which doesn’t happen. Groups cannot be larger than 500 people, which seems like a ridiculously high number for a chat room until you consider the previous fact. There’s no way to get anything viral and there’s nothing close to massive forums and pages like on Facebook. And last, the government invests heavily in censorship, and any bad statements toward the government or anything seen to create civil unrest will be shut down.)
Anyways, I’ve used Venmo over the last year, but I could only pay any number of 500 some odd people I know right now. I use AliPay virtually every day but only have 3 friends (because I have their phone numbers). So I might seem to be contradicting myself in the ease-of-access department.
The problem Venmo has is with businesses; they don’t widely accept it. You can shop online with Venmo (I saw it once) but I’ve never seen a business accept it as payment in a brick-and-mortar store. The network effect is incredibly powerful with AliPay among customers and businesses and that’s the advantage in China.
AliPay and WeChat Pay are absolutely brilliant in China though. It takes 0.1% of a cut if you use it to make huge payments between friends and/or withdraw money. It takes no cut if you use it to purchase something at a store.
It means tiny shop owners don’t take a hit with credit card fees. It means they don’t need the infrastructure for them either, just cell phone signal. It means they don’t have to deal with fake money or large bills for small purchases and not having change. Everyone has a smart phone here, and it allows for a steadier supply of customers for small business owners.
Of course the effect is aided by relatively easier amounts of red tape starting and running a business/roadside stand in China, but the point remains. Whether it would be genuinely useful or simply garnishing stateside remains to be seen. I think Apple Pay is the only thing close to AliPay over here. But, again, it’s good for business and it’s good for customers and it’s good for the government. It’s win-win-win.
Let me know if you agree with my assessment of Venmo and AliPay in the comments below!
Like what you’re reading on China? Check out some other related articles in: The China Chronicles!
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