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Comment by rahimnathwani | Hacker News Reader

I keep hearing this thing about lack of credit cards in China being one of the reasons Alipay and, later, WeChat payments, took off. But I don't see how credit cards are relevant here.

It takes 15 minutes to open a bank account and get a bank card which can be used at ATMs, POS transactions, and online. 'No credit card' doesn't mean 'no bank card'.

What am I missing?

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It basically means the lacking of credit systems and mature fraud detections. If you lose your (credit) card or leak your credit card number, the bank won't probably reimburse your financial losses. Compared to credit cards, mobile payments may be more secure.

That may well be true but why compare them with credit cards at all? Debit cards have all those functions and a much lower fraud incidence.

Credit is very different than bank accounts.

For example, even in countries like Spain, buying a new car and making payments is a new concept.

Without functioning consumer credit, some industries have a hard time.

A functional credit system is fairly essential.

Alibaba in some ways solved that problem by providing guarantees, escrow-ish stuff. More than anything 'credibility' is the value add in a region wherein there is/was little.

Are WeChat payments credit though? I was under the impression it was stored-balance?

I don't believe wechat is credit based. That said, I don't use it.

the problem is on the merchant side. if you're selling $1 bowls of noodle in a small town, buying a POS to read cards is pretty darn expensive, the CC fees are expensive, and there is no real incentive to be the first guy on the block with a POS.

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