Chinese tech leading way in financial payments

Global Business

Chinese tech leading way in financial payments

Under pressure to make money while guarding privacy, Facebook is continually working on transforming its business model.

One key area is payments – a field where China’s influence appears to be growing stronger every day.

CGT’s Mark Niu reports.

Earlier this month, CEO Mark Zuckerberg wrote on Facebook A Privacy-Focused Vision for Social Networking.

His post emphasized building a secure messaging platform like Facebook-owned WhatsApp, with services such as payments and commerce.

When journalist Jessica Lessin re-posted her article from four years ago entitled What Facebook Should Learn From WeChat, Mark Zuckerberg even wrote a comment: “If only I’d listened to your advice four years ago.”

“I think what he’s trying to do is like do what WeChat has already done in China, bring all the merchants, financial services, and the social of course, together to make people have it as a one-stop for everything,” said Vicky Xiao, the U.S. Head of tech site PingWest.

Xiao has witnessed how Chinese tech – once considered just a copycat – is now setting standards that others are trying to copy.

“I think the reverse is definitely happening,” said Xiao. “We can take a look at the bikesharing program.  And also mobile payments, not only WeChat but Alipay, you can see Alipay has launched its services in many countries, which includes microfinancing and mobile payments itself, and I think even some charity programs. I think a lot of local startups are learning from it as well.”

San Jose State University professor Ahmed Banafa agrees Facebook is aspiring to be the WeChat of the U.S., but points out it’s also working on something slightly different—its own currency.

“They will have their own coin,” said Banafa. “The thing is they want to contain it in their own community. It’s like a reward, like points, when you have certain amount of points, for example, for Amazon you have a number of points, you can buy stuff—free stuff for those points. Now they are going to have it as you pay that much you are going to get that many coins — digital — added to your account.  And then you can buy stuff from any advertiser who will accept that.”

Banafa said a currency – and potentially even a Facebook bank – are natural next steps.

But he said it will all come back to Facebook’s number one challenge.

“Now you have more information about us, more about our buying habits,” said Banafa. “Until we are sure about something we call SSP, which is ‘Security, Safety,Privacy,’ then this is another revenue stream for Facebook. They are really expanding into every aspect of our life.”

Banafa said Facebook is trying to mimic WeChat while also developing its own unique features. But in the end, what the social media giant really wants is to become the operating system for our lives.