For the Dutch version of this article, please go to our content partners at China2025!

Last time we took a look into the lives of two locals in China to see what kind of impact WeChat has in their lives. One of the most important features for Hu Shuang and An Di was without a doubt WeChat Pay, offering the possibility for the two to pay for their purchases with their smartphone. WeChat Pay, together with Alipay have a huge impact on China, as the duopoly accounts for a 92.7% market share in third party mobile payments. With most of the transactions in the country being online nowadays, one might question what happens with all the data that has been generated. Unsurprisingly, it turns out that Tencent and Alibaba already came up with a way to utilize the data.

The Payment Credit System

In 2015, Ant Financial Services Group (AFSG), an affiliate of Alibaba Group, developed ‘Zhima Credit’. Literally translated to ‘Sesame Credit’. The system attaches ‘points’ to user profiles, based on multiple factors. The factors include, but are not limited to things such as social media interaction and purchases carried out with Alipay. The score is then used for multiple benefits. Consumers can for example get a loan from AFSG or they could rent a shared bike without paying a deposit.

Although the service launched in 2015, it has only become an important factor recently. The lack of a similar system on WeChat was seen as a big disadvantage for a long time. As such, WeChat has officially started testing WeChat Payment Points, a comparable service. The service which launched at the end of 2018, has slowly expanded itself into more than 66 cities around China. Like Alipay’s Sesame Credit, WeChat users also receive benefits such as deposit free renting and delayed payments. To be eligible for these benefits, users had to reach a certain score set by the seller itself.

Good or Bad?

The use of such a credit system is a controversial topic, although AFSG has emphasized that the data is well protected. Data is only collected upon the user’s consent and knowledge. On top of that, the sharing of data is only possible by the user’s authorization or by themselves. Tencent (mother company of WeChat) has implied similar rules to protect their customer’s privacy.

Even if you take away the concerns regarding privacy, there are still multiple concerns in other areas. Alipay and WeChat already implemented systems for sellers to offer discounts for people above a certain threshold score. In the future, both payment services could implement even bigger advantages for people that they deem ‘worthy’. There’s no telling where the system will stop.

The controversy, however, is not limited to China. Although China is subject to a lot of discussion, this specific ‘problem’ also exists in Germany for example. Germany’s biggest credit agency, Schufa Holding AG, tracks user’s so called Schufa score. The score is based on how reliably you’ve met financial obligations and is inquired before you open a bank account, rent a flat or purchase a phone plan to name a few examples. Although the system is also subject to a lot of critiques, it has been in use since 1997.

Social Credit System’s Footsteps

The credit score system is akin to the infamous social credit system developed by the Chinese government. The social credit system assigns a score to people based on their ‘social behavior’. People can for example get negative points for smoking in non-smoking areas or ignoring red lights. Although the system is currently only run as a pilot, the government intents to go live nationwide in 2020.

It could be argued that the payment system is of a smaller scale and impact than the social credit system, but it’s undoubtedly still a complex and controversial topic. Chinese people in general, however, do not necessarily see the system in a negative daylight. Chinese culture typically values privacy less than the average Western consumer. Despite this, anonymity is still of important value.

The question is where the payment credit system will lead to in the future. The social credit system has already blocked tens of millions of people from purchasing train and plane tickets, based on their social score. This limit obviously has a huge impact on people’s abilities and chances. Just imagine that An Di, who lived and worked in Beijing far away from her family, didn’t have the option to visit her family anymore because she crossed a red light a few times. The payment credit system could someday grow to similarly limit people’s options, while simultaneously boosting people that already enjoy good circumstances with more advantages. Without a doubt, a growing gap between rich and poor is also unfavorable for the Chinese government, so it will be interesting to see how they will avoid this.

Categories: eCommerceLifestyle

Subscribe to our Newsletter


Get in Touch

You can find us at:

Amsterdam Office

Johan Huizingalaan 763a
1066 VH Amsterdam
+31 (0)20 8932 533

Shanghai Office

129 Datian Road, Jing’an District
Rm.5G/F Jiafa Building, 

+86 (131) 2090 2203

Contact Us


    Contact Us