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> For merchants taking WeChat pay, the transaction fee seems to be a flat 0.6%, compared to 2%-3% in the U.S.

Where the heck is 3% even allowed in the USA?

> 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.

Tapping the card to the NFC terminal is super easy. You don't even need to take your card out of the wallet if its in front.

What do you mean where the heck is 3 percent even allowed? How do you think banks in the USA are issuing 2 percent cash back credit cards? Who do you think is paying for that?

> Tapping the card to the NFC terminal is super easy. You don't even need to take your card out of the wallet if its in front.

The whole point here is how to entirely get rid of the wallet. your ID, your cards, receipts, parking tickets etc should all be digital. in fact, that is exactly what WeChat/Alipay are offering or battling for.

WeChat based ID card with approval from the Public Security Bureau: https://www.huxiu.com/article/169540.html

I'm more likely to always have a wallet on me than a phone on me. The base notion that a phone is literally essential to daily life but a wallet is not has yet is not a proven assumption.

Many Chinese don't drive, so going wallet free is more feasible.

> should all be digital

I don't know what it means, but reading this all I could think was how there is absolutely no way Penndot is ever going to make Drivers Licenses in PA digital. Ever. They only just let people register to renew online like 2 years ago. You still have to drive to the DMV anyway, you can just sign up to get it renewed in advance for "fast processing".

State institutions resist technology to a pathological degree. At least in regards to ease of constituent use. They all have websites and have facebook groups and such, but they (by law, usually) never use it to improve the experience interacting with them.

Actually this is a terrifying prospect. I can just imagine being arrested because the ID network is down. You people need to watch Black Mirror.

I find the idea that I could be arrested for not having a physical ID at least as terrifying.

You must be a very scared person then.

Not really. I'm quite certain that arresting me for not carrying ID would be illegal in the United States. Note that in some states I might be required to identify myself, but simply stating my full name counts; I don't have to have a physical government-issued ID. Similarly, I am required to carry a driver's license when driving, but forgetting my license at home will at most result in a ticket.

There's just no plausible scenario where I get arrested and taken to jail simply for not having a physical ID with me.

You're quite wrong. It's happened to me.

Cards are not a pain in general, only on payments above the contactless threshold. And if you're buying something expensive, you likely wont mind the extra minute for PIN and/or signature.

To add to this: it's not just low transactions fees for the merchant, it's cheaper payments for the customer as well.

Both Alipay and WeChat have spent billions subsidizing and discounting. Go into a restaurant in Beijing and there's a good chance you could get 10 or 15% off your bill by paying with WeChat.

So given that it's both cheaper for the merchant and cheaper for the customer it's no surprise it has taken off so much.

Well yes and this is because they are paying to build the infrastructure out. In the U.S. that infrastructure already exists so there's no need for subsidies.

But to add to that, I would love to live in a world where I don't have to play the credit card game, but using cash in the U.S. at least is putting you behind. The prices are the same for an item whether you use cash or not, except with even the worst credit card you can get 1% cash back.

I'd love to know the historical reasons

Sure, but this is my personal view, so of course take it with a grain of salt.

Capitalism, and hence consumerism, is a relatively recent thing in China, dating only to the 80s. Therefore, the well-developed mechanism in the Western world that encourages and protects it are still lagging.

One significant aspect of it is consumer protection. Chargebacks are almost unheard of in China. Fraud protection is pretty much nonexistent. The results are twofold. First, security is an utmost concern, which explains the PIN-and-signature requirement in POS. Second, free of the responsibilities, banks can offer a much more attractive interchange rate.

Another aspect is credit is not as developed in China. Of course, culture plays a large part as well, as traditionally Chinese value saving over spending. Therefore, there aren't crazy cash back schemes that American banks offer (credit card points do exist, but nowhere as lucrative), and people don't lose anything by switching to mobile payment, which are basically prepaid cards.

These two situations are of course rapidly changing. Younger generations are much more willing to take credit (and you hear horror stories of young girls using their naked pictures as collateral), and more and more company realize consumer protection can be used as a competitive advantage. But mobile payment took foothold before traditional card did, so looks like they are here to stay.

Very interesting information. I'm quite interested in the spread of western economics over other parts of the world, China, India, African countries too.

I'm not fond of consumerism at all, but the way each country structure and culture absorb it is interesting.

> the transaction fee, for many, is perceived as a rip off

Only if you're a merchant. Most of the 2-3% fee is transferred to consumers via reward programs. It's important to understand that merchants and consumers face different incentives and that US card networks have aligned themselves with consumers.

The merchant is charging more to cover the fees. THEN the user often gets 1% or less back in rewards that are both less flexible and less useful than more cash in your pocket.

> The merchant is charging more to cover the fees.

This is what everyone assumes, but it turns out it's false. We are fortunate to have some experimental evidence on this. In 2003 Australia slashed interchange fees through regulation. Prices did not decline.

"...retailers saved more than $400 million (Australian) annually in fee revenue after interchange rates there were cut, but there was no evidence that they passed any of the savings on to consumers. Instead, consumers saw higher card fees, a reduction in loyalty benefits, and the introduction of surcharges of up to 3% on credit card transactions, the report found."[1]

[1] http://www.digitaltransactions.net/news/story/Report_-Austra...

1% or more is a better phrase. Add to that, if the merchant is charging higher fees then you would have to get everybody to collectively stop using credit cards at the same time, or otherwise every time you use cash you're paying extra on your purchase.

In EU you have a pin and you also have to sign the receipt. In supermarkets, cards (debit or credit) queue up the checkout line.

Cash is way faster, hands down. I bothered to compare the difference once, since cards here are not the norm. We're talking between 5-10 seconds (cash register) vs 30-45 seconds, most of which are dead times (waiting for confirmation).

In the EU (at least here in Germany), if you have entered your PIN, you don't need to sign the receipt. If the PIN is not required during payment, then you need to sign.

Edit (replying to child): This applies when paying with credit card and EC/girocard. I don't know what you mean by ATM circuit.

You have to note: are you paying with the ATM circuit or with the credit card?

The ATM circuit often doesn't require an additional signature (although in some countries like IT it's still required)