How China Leapfrogged Ahead of the United States in the Fintech Race
This blog post on the rise of online payments in China is the first in a three-part series covering recent fintech developments in China and their implications for global commerce. Why is China ahead?
LACK OF CREDIT CARDS AND GROWING INTERNET COMPANIES SPUR NEED FOR ONLINE PAYMENT SYSTEMS
The first factor in China’s rapid progress, ironically, is the backward state of China’s payment infrastructure in the early 2000s, when Internet companies were beginning to expand. E-commerce firms were forced to develop their own payment tools to build nationwide businesses in ways that their counterparts in the United States were not.
LEGAL SAFEGUARDS, MINIMAL REGULATION, AND SMARTPHONES FUEL GROWTH IN ONLINE PAYMENT SYSTEMS
The second key factor in the growth of online payments was Chinese government support. China’s 2004 electronic signiture law for online contracts, and a series of policies starting in 2005 called for the “advancement of the online payments system.”
CHINESE INTERNET FIRMS' FINTECH INNOVATIONS PAY OFF WITH SUCCESS
The success of online payments in China is the result of a symbiotic relationship with Internet firms, which provided the original use case for their payment business.