[marco_salvatori]

Yes, strict separation will probably be the norm where there are sovereignty issues. And it will be enforced both ways. So for example,I will make the claim that if Alipay expanded into the US it would own the entire payments market in one year. Alipay is just that much better than anything else available in the US. Plausible or not, Alipay will never operate successfully in the US because the US will not cede sovereignty over part of its financial infrastructure to China.

I can not say if that is smart or not. That question is outside of my technical sphere of competence. But I believe it's an accurate evaluation of how states will operate, as soon as these systems start being used to project power.

[seanmcdirmid]

I lived in China for almost 10 years and had to use cash all the time. Towards the end of that alipay and whatever wepay became popular. I moved back to the states and went back to using a credit/debit card or everything, and haven’t been to an ATM in a year and I don’t even bother carrying around cash at all anymore.

Alipay was solving a China-specific problem (credit card infrastructure and policies were never really very good), why would westerners stop using cards to awkwardly hold their phones up to QR scanners? That just isn’t going to happen. It is a sovereignty issue at all, it just doesn’t make sense. The west doesn’t have the small scale retailers that would benefit from that, everyone in retail can afford at least Square.

[phobosdeimos]

This is a good point. You can do things with your smartphone in China that not even advanced markets in Europe have figured out. The US tech sector isn't the only player anymore.

[seanmcdirmid]

Again, it’s not that they haven’t figured it out, it’s that there is no need to do it. I’ve seen how payments happen with the phone by exhanging QR codes, it’s a nice trick, but how could anyone claim that is better than the chip, swipe, and tap infrastructure already pervasive in the west? China basically skipped credit and debit cards, the West didn’t.

[phobosdeimos]

The only thing that is pervasive in the US are creditcards and the less said about those the better.

[seanmcdirmid]

That really isn't true at all. Ya, they have a high-ish merchant charge, but you don't see that as a consumer.

You can also go with debit cards if you want to, the only extra step is entering a PIN sometimes (for some purchases over some amount).

In Australia, they have it even better by having much more pervasive tap to pay in place. Why would anyone choose Alipay over tap to pay? You would have to be nuts.

[hakfoo]

There are some other issues, but I'm not sure they're fixable by technology alone:

* Getting from zero to accepting payments is long and complicated. Some of this can be streamlined, but how much of it is limited by anti-money-laundering regulations?

* The concept of "you can initiate a charge as long as you have about 40 bits of information, and can do so for 2-5 years or until the card is revoked" is a model doomed to fraud problems.

* There's no legal requirement that all potential legal merchants get serviced or at fair rates. See the recent discussions about payments for the porn industry; plenty of processors will not want to work with gun dealers.

* There's no solid standardization, so you can't shop around providers freely because changing who you buy from may mean you have to replace your swipe machines or rebuild your cart to talk to the new vendor's gateway of choice.