The Dominance of Electronic Payment Technology in China BY GARRETT WILLIAMS
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n recent decades, technology has regularly transformed the ways in which we interact with each other in society. Technology defines our relationships with others by assisting, regulating, or hindering interactions with them. Recently, new apps and services have begun to transform the way we pay for goods and services. With the proliferation of apps such as Venmo, Paypal, and CashApp, and services such as Apple Pay, electronic payment technology has substantially impacted the nature of economic exchanges in America. The most significant effect is that electronic payment technology opens up the world economy by allowing individuals across the world to participate in markets because digital payment transcends geographical limitations. Additionally, electronic payment services allow individuals to better track their expenses, exchange money faster, and avoid dealing with inconvenient currency denominations. Although many Americans are swapping their print money for new digital payment
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services, they are still clinging onto debit and credit cards. It would be reasonable to assume that the United States leads the world in the adoption and usage of new technologies, but surprisingly, China is a massive trailblazer in the adoption of mobile payment apps. From 2012 to 2018, the total market share of mobile payments in China grew from 4.0 percent to 83.0 percent compared to non-mobile payment forms (Source 7). China’s widespread use of electronic payment is an interesting case study in the tradeoffs of switching to a cashless economy. However, in order to understand the rationale behind China’s acceptance of electronic payments technology, it is important to analyze the historical context. China has a deep history of authoritarian rule by highly centralized governments, most recently under the rule of the Communist Party of China. Initially a communist economy under the rule of Mao Zedong, China’s economic system today is a form of state-run or state-sponsored capitalism, defined as a market economy with many industries man-
aged or dominated by state-owned firms. Since initiating economic reforms in the late 1970s under Deng Xiaoping to privatize parts of its economy to cut inefficiency and spur economic development, China experienced the most rapid economic growth seen in modern history. Over 30 years of double-digit growth lifted 850 million people out of poverty (Source 5). Today, China is an economic powerhouse with the largest GDP in the world and the largest and fastest growing consumer middle class. China’s authoritarian rule extends to its relationship with its citizens. Because of China’s desire to effectively control its massive population, the government has several methods through which it exercises extreme surveillance on its people. As one of their ways to control the populace, the Chinese government has constructed a sprawling system of over 170 million surveillance cameras equipped with facial recognition and artificial intelligence to maintain social order (source 1). Their surveillance even extends beyond
