<story><title>In Urban China, Cash Is Rapidly Becoming Obsolete</title><url>https://www.nytimes.com/2017/07/16/business/china-cash-smartphone-payments.html</url></story><parent_chain><item><author>mahyarm</author><text>Android was released a couple years after the iphone and it has defined the low end market.  From the USA.&lt;p&gt;A big reason why QR codes caught on in China is because everything else was really bad.  In america, credit cards were &amp;#x27;good enough&amp;#x27; compared to what was in china, so QR codes didn&amp;#x27;t catch on that quickly.  Also because it&amp;#x27;s a wealthier nation, the typical merchant could afford the hardware required for processing cards, but QR codes all you needed was a print off and the mobile phone you already had as a merchant, which made more sense for china at the time.&lt;p&gt;Then network effects kicked in and QR codes became the standard.&lt;p&gt;You see similar environment specific things that created this kind of stuff.   Like whatsapp took over the world because SMS cost something, while in the USA it was effectively free and good enough, so whatsapp wasn&amp;#x27;t a good enough thing to switch to.</text></item><item><author>thablackbull</author><text>I think this is a good illustration of the different approach in how China and America approach the consumer economics space. In America, there is a very heavy reliance on &amp;quot;trickle down&amp;quot;. We create a &amp;quot;best-in-class&amp;quot;, &amp;quot;top-of-the-line&amp;quot; product that only the elite and wealthy can buy into. These people then set the tone of how it will develop in the future. The first mover also tries to do everything in their power to lock you into the ecosystem. Examples of these are iPhones (and the app ecosystem), Tesla, etc.&lt;p&gt;In China however, they throw away that pride of creating the greatest and shiniest. Instead, they start off with an &amp;quot;inferior&amp;quot; product but use the scale of their population to bring down costs and they try to ensure everyone has access. The top example is smartphones. In the article itself, &amp;quot;Even the buskers were apparently ahead of me. Enterprising musicians playing on the streets of a number of Chinese cities have put up boards with QR codes so that passers-by can simply transfer them tips directly.&amp;quot; China starts off with a product that gives every citizen a chance to get in on, not just the wealthy, and they build up their economy from the bottom up, rung by rung.&lt;p&gt;The way I see it, we have democracy in politics but in products, its authoritarian because its guided by the billionaires and wealthy. In China, they have an authoritarian political system, but democratic economy space because they can actually vote with their wallets.</text></item></parent_chain><comment><author>nickrio</author><text>I&amp;#x27;m a Chinese &amp;amp; living China, I shopping almost only with credit cards and cash for privacy consideration.&lt;p&gt;However, I don&amp;#x27;t think credit cards in China are as popular as it is in the USA. I could guess most Chinese people don&amp;#x27;t have any credit card.&lt;p&gt;Chinese traditional culture encourages saving, not loaning. And taking small loans is exactly how credit cards works. So maybe that&amp;#x27;s why people here don&amp;#x27;t like credit card very much.&lt;p&gt;QR pay (Or mobile pay, OR more specifically, Alipay and Tenpay etc) can acting like a gate way between seller, user and bank. It can pay with the money you already have, no need to loan from the bank. So I think it&amp;#x27;s a &lt;i&gt;Culture Match&lt;/i&gt;.&lt;p&gt;Beside that, take a wallet (Which is needed for protecting your credit cards from been scratched) everyday is a burden. I could really be happier if I can get rid of it from my EDC (I can&amp;#x27;t get rid of my phone, so).</text></comment>
<story><title>In Urban China, Cash Is Rapidly Becoming Obsolete</title><url>https://www.nytimes.com/2017/07/16/business/china-cash-smartphone-payments.html</url></story><parent_chain><item><author>mahyarm</author><text>Android was released a couple years after the iphone and it has defined the low end market.  From the USA.&lt;p&gt;A big reason why QR codes caught on in China is because everything else was really bad.  In america, credit cards were &amp;#x27;good enough&amp;#x27; compared to what was in china, so QR codes didn&amp;#x27;t catch on that quickly.  Also because it&amp;#x27;s a wealthier nation, the typical merchant could afford the hardware required for processing cards, but QR codes all you needed was a print off and the mobile phone you already had as a merchant, which made more sense for china at the time.&lt;p&gt;Then network effects kicked in and QR codes became the standard.&lt;p&gt;You see similar environment specific things that created this kind of stuff.   Like whatsapp took over the world because SMS cost something, while in the USA it was effectively free and good enough, so whatsapp wasn&amp;#x27;t a good enough thing to switch to.</text></item><item><author>thablackbull</author><text>I think this is a good illustration of the different approach in how China and America approach the consumer economics space. In America, there is a very heavy reliance on &amp;quot;trickle down&amp;quot;. We create a &amp;quot;best-in-class&amp;quot;, &amp;quot;top-of-the-line&amp;quot; product that only the elite and wealthy can buy into. These people then set the tone of how it will develop in the future. The first mover also tries to do everything in their power to lock you into the ecosystem. Examples of these are iPhones (and the app ecosystem), Tesla, etc.&lt;p&gt;In China however, they throw away that pride of creating the greatest and shiniest. Instead, they start off with an &amp;quot;inferior&amp;quot; product but use the scale of their population to bring down costs and they try to ensure everyone has access. The top example is smartphones. In the article itself, &amp;quot;Even the buskers were apparently ahead of me. Enterprising musicians playing on the streets of a number of Chinese cities have put up boards with QR codes so that passers-by can simply transfer them tips directly.&amp;quot; China starts off with a product that gives every citizen a chance to get in on, not just the wealthy, and they build up their economy from the bottom up, rung by rung.&lt;p&gt;The way I see it, we have democracy in politics but in products, its authoritarian because its guided by the billionaires and wealthy. In China, they have an authoritarian political system, but democratic economy space because they can actually vote with their wallets.</text></item></parent_chain><comment><author>thablackbull</author><text>I&amp;#x27;m not disagreeing with anything you said but I suppose I am more commenting on the difference in attitude and execution.&lt;p&gt;While services like Android&amp;#x2F;Watsapp were created in the West and do service the lower end market, they still follow the &amp;quot;leader&amp;quot;, isn&amp;#x27;t seen by the population as &amp;quot;cool&amp;#x2F;hip&amp;#x2F;etc.&amp;quot; Even with credit cards, there are many merchants here that don&amp;#x27;t accept them (especially Amex) and Visa because of the prohibitive fees. The attitude in America is, define your market (high end&amp;#x2F;low end) and then extract the absolute amount of wealth you can, and defend your market share by any means possible.&lt;p&gt;In contrast, as you saw with the busker in the article, when it is rolled out in China, it is truly (almost) for everyone. They try to use economics of scale to get everyone on board so the entire nation is moving as a collective. Another example is the high speed rail; I recall reading an article that even though wages doubled, the fares didn&amp;#x27;t budge at all. It just allowed more and more people to take advantage of a good service. In America, you&amp;#x27;d bet they try to increase fares as much as possible to extract as much as possible out of the consumer. Obviously there are problems, as with inferior phones, but when everyone is on board, there is an acceleration in innovation and they start solve those problems. Then you see things like people wanting higher end models and companies are forced to innovate. A company like Xiaomi which dominated suddenly drops to 4th place and needs to innovate - that is a sign of a healthy market.</text></comment>