Foreigners visiting China are increasingly stumped by its cashless society

[IndianGuy_]

Cashless society is future and China is leading the way in this regard. They do however need to make it user-friendly for tourists.

 

[Hamartia Antidote]

Ok, so you don't use cash and all your transactions can be made in one second, good to know.

Yep you’ll be waving your phone someday and hear the beep and off you go.

 

[beijingwalker]

Cashless society is future and China is leading the way in this regard. They do however need to make it user-friendly for tourists.

No, US had long been cashless, they finish transactions in a second, All Chinese can only make that happen in 5 second, US wins.

 

[nang2]

Yep you’ll be waving your phone someday and hear the beep and off you go.

I don't know why you guys are debating about the speed of payment. All new electronic payments have similar speeds, at least not having magnitudes of difference. What sets one apart of the rest is how ubiquitous it is. China has a new system that is ubiquitous largely due to the fact that credit card system was not. Such a system is having a trouble penetrating western markets largely due to the fact that credit card system is ubiquitous there.

 

[beijingwalker]

I thought he means all Americans use that and they make transactions faster than Chinese cause all Chinese just use QR code. no? if not, it's indeed pointless, technology is there but what matters is how many people use them and make them a basic daily fact of life.

 

[Hamartia Antidote]

I don't know why you guys are debating about the speed of payment. All new electronic payments have similar speeds, at least not having magnitudes of difference. What sets itself apart of the rest is how ubiquitous it is. China has a new system that is ubiquitous largely due to the fact that credit card system was not. Such a system is having a trouble penetrating western markets largely due to the fact that credit card system is ubiquitous there.

I was only originally pointing out his assertion that the QR system is faster than the Western credit card system. Considering there are multiple ways to use cards (swipe, tap, phones, chip) most of them are pretty fast...that’s why it isn’t easily superceded.

 

[Paul2]

I don't know why you guys are debating about the speed of payment. All new electronic payments have similar speeds, at least not having magnitudes of difference. What sets one apart of the rest is how ubiquitous it is. China has a new system that is ubiquitous largely due to the fact that credit card system was not. Such a system is having a trouble penetrating western markets largely due to the fact that credit card system is ubiquitous there.

Last time I was in Germany, there was number of Visa QR codes here and there. The beauty of that is that it is your bank who starts the transaction and sends the money, not the acquirer's bank posting a debit to your acc.

So, technically you can take your QR code for your German bank account and credit it everywhere =D. I guess somebody is already taking advantage of that.

 

[beijingwalker]

I was only originally pointing out his assertion that the QR system is faster than the Western credit card system. Considering there are multiple ways to uses cards (swipe, tap, phones, chip) most of them are pretty fast...that’s why it isn’t easily superceded.

China also has all those service, it's not only for the west, I m talking about China being a cashless society and this is what this thread is all about.

 

[nang2]

Last time I was in Germany, there was number of Visa QR codes here and there. The beauty of that is that it is your bank who starts the transaction and sends the money, not the acquirer's bank posting a debit to your acc.

So, technically you can take your QR code for your German bank account and credit it everywhere =D. I guess somebody is already taking advantage of that.

It is not just an appearance of a QR code that does all the work. The entire supporting system behind it has to be in place to make it happen. Just because it is ubiquitous in China, some people naively assume how easy it is to become ubiquitous. That is just not true. It started with Alipay, whose headquarter is in Hangzhou, China, my hometown. In the very beginning, they were effectively giving POS away with a loss to create critical mass. They had the cash, the motivation and the opportunity (lack of credit card) to do so. It cannot be simply copied. You still need all 3 conditions to make it happen.

 

[Paul2]

It is not just an appearance of a QR code that does all the work. The entire supporting system behind it has to be in place to make it happen. Just because it is ubiquitous in China, some people naively assume how easy it is to become ubiquitous. That is just not true. It started with Alipay, whose headquarter is in Hangzhou, China, my hometown. In the very beginning, they were effectively giving POS away with a loss to create critical mass. They had the cash, the motivation and the opportunity (lack of credit card) to do so. It cannot be simply copied. You still need all 3 conditions to make it happen.

The thing is that you don't even need the acquirer to be in your country. Take a look just how many Alipay codes outside of China are not for foreign version of Alipay, but for original Zhifubao. They open account in China, and then send the code for use abroad.

 

[nang2]

The thing is that you don't even need the acquirer to be in your country. Take a look just how many Alipay codes outside of China are not for foreign version of Alipay, but for original Zhifubao. They open account in China, and then send the code for use abroad.

I don't understand this paragraph. What is "acquirer"?

 

[Paul2]

I don't understand this paragraph. What is "acquirer"?

The company that debits your bank account when you purchase something with credit card

 

[nang2]

The company that debits your bank account when you purchase something with credit card

Still don't get it. All transactions require two parties to participate. It is impossible to have one party with one type of electronic payment setup while the other has nothing to do with that setup. Even with cash payment, you still need an agreement between two parties, one willing to pay with certain cash and the other willing to accept that amount in the same cash. No payment can be done if the other party cannot do with that cash, i.e. it is useless to him.

 

[Paul2]

Still don't get it. All transactions require two parties to participate. It is impossible to have one party with one type of electronic payment setup while the other has nothing to do with that setup. Even with cash payment, you still need an agreement between two parties, one willing to pay with certain cash and the other willing to accept that amount in the same cash. No payment can be done if the other party cannot do with that cash, i.e. it is useless to him.

Ok, this is how it works with Visa:

1. Seller enters transaction amount into the terminal
2. You put credit card into it, and enters your pin
3. The terminal checks if your pin is correct and send a request to his bank (acquirer's bank) "card number 123123 made transaction for $5"
4. The bank then call your bank, and says this guy owes us $5
5. At the end of day or week, acquirer's bank calls your bank and says deposit that $5 into their account in central bank

With mVisa:

1. You scan the code, and its is decoded into something like: bank ABC, account number 123213, transaction amount $5
2. Then your phone send a request "send $5 to account 123123 in bank ABC from card 321321" to your bank
3. Your bank then calls seller's bank and says this guy owes $5 to account 123123
4. Then it is settled at the end of the day or week

 

[nang2]

Ok, this is how it works with Visa:

1. Seller enters transaction amount into the terminal
2. You put credit card into it, and enters your pin
3. The terminal checks if your pin is correct and send a request to his bank (acquirer's bank) "card number 123123 made transaction for $5"
4. The bank then call your bank, and says this guy owes us $5
5. At the end of day or week, acquirer's bank calls your bank and says deposit that $5 into their account in central bank

With mVisa:

1. You scan the code, and its is decoded into something like: bank ABC, account number 123213, transaction amount $5
2. Then your phone send a request "send $5 to account 123123 in bank ABC from card 321321" to your bank
3. Your bank then calls seller's bank and says this guy owes $5 to account 123123
4. Then it is settled at the end of the day or week

That requires two banks work together, just as I said. In this case, as a payer, my bank is Alipay (or Zhifubao if you prefer). What if the seller's bank has no agreement with Alipay?

Also, in your first case, Visa acts as a clearing house. Banks work with Visa, not with each other. Alipay effectively serves the same role. That is why you always need the buy-in from the seller's bank. Your seller's bank is always an acquirer's bank. Otherwise, when your bank calls seller's bank, the seller's bank will just tell it to f#*k off.