Hacker News Reader

It's the existing social graph that's important.

Some other points you made aren't the main drivers of success:

People pay for everything with cash They also have bank cards and Alipay, and had them before WeChat payments existed.

Sometimes you don't bring enough cash with you Yeah, and I used to use Alipay to reimburse friends, before WeChat payments.

Paying for each others' meals WeChat doesn't help with that. It helps you pay for your own portion, as you can use WeChat to reimburse the person who paid the restaurant.

People don't have credit cards I'm not sure that _credit_ is relevant. Everyone has a chip+pin bank card (what I'd call a debit card in the UK). People have been paying with bank cards in restaurants for many years.

You made one point which is important: "Everyone and their mothers has a WeChat (I've never met anyone that doesn't... it's more ubiquitous than Facebook in the US)"

But practically everyone has an Alipay account as well. The thing is, I have 100s of contacts on WeChat (which I added for messaging) but only 10-15 on Alipay. It's the existing social graph, not just the number of users, that's important.

I think that's simplistic. All of the points are important together

Like I said, Facebook has the social graph and no one uses their payment system b/c

1 - you pay with credit cards and they're super entrenched and you don't forget your credit card like you may forget to bring enough cash

2 - at least personally... I rarely find I need to give my friends money in the US. It happens once in a while.. but not every week like in China

Sure, the social graph is not enough on its own. There's something different about China or its stage of development.

But the specific points you raised mostly don't help us understand what's going on. (1) is incorrect, (2) applies even more in the US than in China, (3) is just wrong, (4) is irrelevant as people have bank cards.

I say (3) is just wrong because: (i) WeChat doesn't facilitate paying for each others' meals; it only helps when splitting the bill, and (ii) red envelopes weren't a daily thing before WeChat. They were only for special occasions.

Anyway, I think we can agree there are multiple factors that got WeChat payments to where it is. I'm not sure I have any additional insight :)

In the country I am, everyone have cards but I have literally never seen anyone pay with one outside of bigger restaurants. I imagine China is likely to be within the category as well (loads of places to eat that does not have card readers).

In Beijing and Shanghai:

- the only restaurants I've seen that have no card readers have fewer than 8 seats

- the only restaurants I've seen which accept WeChat payments, also accept bank cards

As I understood, the WeChat payments is not what is used to pay for the meal. I assumed person A would pay for the meals of other people, then they would pay to a directly A via WeChat.

For the restaurants, admittedly I have not been in China. I live in Bangkok and here are loads of "street food" and "mom & pops" restaurants. I just assumed it was similar in China, the examples you have Beijing/Shanghai is also huge and quite modern iirc. What about other cities, outskirts or restaurants people eat for daily meals? (If that's a thing there).

Another reason is that you get better deals paying with WeChat than cash. For example, you might get 20% off a meal if you pay with WeChat (or some other mobile payment like AliPay). This adds up very quickly.

From what I've read in a recent article, WeChat has 95% market penetration in Tier 1 cities, which is insane.

5% of people in Beijing/Shanghai/Shenzhen/Guangzhou don't have wechat? I suppose there are people who are still using QQ, but 5% seems high for wechat non users.

I'd imagine more than 5% of the population are too old/young to even use a smart phone.

Infants, people in comas, and the severely disabled probably don't have wechat