China Increasingly Combining Mobile Payments and Identification

May 17, 2018         By: Steven Anderson

While some of China’s moves in the past have been a little unnerving, like its social scoring plans and its ban on many forms of cryptocurrency, some of its measures have been unnerving in a different way: their prescience. China’s government and commercial arms are working together to build a new kind of digital identification system that not only takes the mandatory ID, but also incorporates mobile payments into the mix. Just to top it off, it’s poised to secure the whole thing with biometrics measures.

The mobile payments arm of the digital ID system is being staged, not surprisingly, primarily by Alibaba, reports note. Test programs are poised to kick up in Fuzhou, Hangzhou, and Quzhou, though information about timing is restricted to “soon.”

Basically, reports note, the intent is to see what happens when pretty much everybody has a mobile payments system on hand, and given that Alipay already has 520 million users to its credit, Alipay will be one of the best ways to push such a plan since it’s already on hand. Since Alipay users have to present real names and national ID card numbers before use anyway, it’s reasonable to tie that into the ID directly.

For those who think that this is the death knell for WeChat Pay, think again; Tencent, WeChat’s parent company, is also involved in the project, and in Guangzhou’s Nansha District, reports suggest that WeChat users have already been connecting their national ID to WeChat accounts. Moreover, such a project has substantial support, including the China Construction Bank and the Ministry of Public Security.

China doesn’t seem to be playing favorites in this effort, but is rather trying to accelerate the pace of mobile payments to the point where it’s automatically connected to the ID. Imagine if your driver’s license were also a debit card, and you’ll get the thrust behind this effort. Disconcerting, to be sure—it takes “identity theft” to a whole new and utterly disturbing level—but the convenience factor is there as well.

Only time will tell just how well this all works, but the potential for abuse here certainly has a disturbing ring to it. Still, it might work out well in China, even if it wouldn’t translate well most anywhere else.