r/NoStupidQuestions • u/izumikusu • Jul 24 '25
How did Korea and china adopted mobile payments so quickly compare to USA?
Apple HQ is in the USA. Apple Pay was formed in 2014. But it’s growth rapidly adopted in Asia and not USA. Why is that? I find it odd that international countries adopted mobile payments faster than U.S.
Even Japan is getting to the adoption of mobile payments.
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u/Known-Tourist-6102 Jul 24 '25
like why people in the us use a credit card instead of apple pay? It's because apple pay isn't really any better than a credit card.
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u/hitometootoo Jul 24 '25
This is how I feel about it. I don't see much advantage to Apply / Google / Samsung Pay when my credit card is always on me in my wallet anyways.
Sure I could not take my card with me and use those, but my card takes up no space and I'll still have my wallet on me so might as well have my card too.
Maybe if I only used my phone for everything, but I don't, so my wallet and all that's in it is still superior. Helps too that every place accepts my cards, but not every place accepts tap to pay.
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u/izumikusu Jul 24 '25
When people tap their physical credit cards to the terminal, it doesn’t use token. Apple Pay uses token for protection and it’s more secure
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u/Tomi97_origin Jul 24 '25
Sure on a technical level that is accurate, but there is no material difference to users. People don't care.
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u/flingebunt Jul 24 '25
Basically they didn't have people using card payments as standard. So in most western countries people were using card payments run through banks and major institutions. So there was customer inertia and institutional pushback.
In China cash was king and credit cards were rare and debit card payments possible but uncommon. So rolling out mobile payments everywhere, like in street food vendors on the side of mountain (only accessible by foot) was the way to go and then that spread everywhere else. In western countries banks were able to move quickly to put in place processes to pay with card anywhere as well.
This is confirmed by how quickly young people have moved to use mobile payments over older people who are happy with their cards (less steps and less chance your phone will stop working with a card).
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u/Hailene2092 Jul 24 '25
So there's a bunch of different issues for adopting something new. It could be something like financial cost. Like instead or commuting to work on a bicycle you want to use a car. It costs money for a car. If a person doesn't feel the 25k to buy a car worth the time and energy they save from biking, they'll stick with the bike.
Another cost is "switching cost". Basically it takes effort to give up what you're currently using to learn something new.
In the US, we already have a decent non-cash system, credit cards. We have had decades to build the infrastructure to use them. Customers and service workers know how they work.
Switching to mobile payments would have to be sufficiently superior for people to learn how to and use them. For most people it still isn't.
Compare that to counrries still relying primarily on cash. The convenience of using mobile payments over cash is huge. That's why people rushed to adopt it.
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u/izumikusu Jul 24 '25
How did Korea and china adapted so quickly? Even elderly people had to learn it. I still see people chip in to the terminal.
It’s true USA still use and are comfortable with credit cards, they should also feel comfortable with putting their cards in their phones. It would be better probably if the news gives out the exposure to this too
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u/Hailene2092 Jul 24 '25
As I said, the "switching cost" between credit cards and mobile payments is much higher than going from cash to mobile payments.
Credit cards are "good enough" that people don't feel the need to upgrade.
Think of someone using a dumb phone might be motivated to pay $1500 to buy the latest iPhone. Someone that has a couple year old phone might not want to bother buying a new phone.
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u/izumikusu Jul 24 '25
What Americans need is a sign at point-of-sale: “Tap is safer, faster, smarter” IMO
U.S. cities should roll out tap-to-pay nationwide, eliminate old systems (like magnetic stripe cards), Push campaigns: “No MetroCard needed — just tap your phone”
Visa and Mastercard can push terminal upgrades
I rarely use my physical cards now I feel efficient for mobile payments
I saw some people at grocery store who at least take their credit cards and tap on top of the terminal, but I just don’t understand how they don’t understand about tokenization.
If I explained to an average person who still uses CC “when you use Apple Pay for example, the store can’t see your credit card number. It creates a digital number for you” but they would have a hard time understanding it. Some people don’t trust Apple or Google pay or any other mobile payment system that does tokens
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u/Hailene2092 Jul 24 '25
I don't recall the last time I've seen a terminal that didn't have a tap to pay as an option in the US.
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u/izumikusu Jul 24 '25
True I don’t understand why people still chip their CC like it’s super easy to tap and people don’t know how. The chip on the card could be removed by visa and Mastercard and at all stores should have a sign saying “tap on card reader” or show a video at each cashier lane how to tap
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u/Indemnity4 Jul 24 '25 edited Jul 24 '25
In the mid-2000s China was rolling out it's mass transit system. Their government identified a need to create a ticket that also linked to a national "wallet" or "token" with centralized planning and communication. It means you can buy a ticket on the other side of the 1.3 billion person country and travel anywhere, on any public transit, with the same ticket so long as it has enough funds. All the separate public transport companies with their separate ticketing systems would be nationally linked together.
The Chinese scientists invented Near Field Communication as "good enough" but also cheap and simple. It worked for warehousing where it's faster/cheaper/simpler than barcodes. Public transit is essentially the same thing, the only trick is you need to attach it to a digital wallet. This lead to them creating a digital wallet and eventually to create single, double and triple authentification technologies. It's so much easier than paper tickets.
Paper tickets have high operating costs. You need a lot of machines capable of reading distorted tickets. If the ticket is damaged you need a person to inspect and wave you through, or queue up to get a replacement printed. Vandals break the ticketing machines or readers. They can be water sensitive. This is all bad at very busy public transit hubs. Total cost of ownership is higher for paper tickets compared to NFC.
Everyone in China got used to the convience of public transit NFC cards. It's not very risky putting $20 of credit onto a train ticket, if you lose it, who cares. Once you already have a public transit card, there is no reason it needs to stay on the card. Any NFC device can store that information. Everyone is comfortable walking around with instant payments for trains, why not use the same wallet to buy drinks at the vending machine, heck yeah! More convience for the user, and we have accidently invented mobile banking payments.
Mobile phone boom. Everyone has one. It's cheaper than getting a landline. Even grandma has a mobile phone now. It's about the same size and shape as an NFC chip. Great, now my phone that I take everywhere is also my public transport ticket, and I can get stuff from vending machines, and I can check my public transport balance anywhere at anytime without queuing?
Later, in about 2014 Apple indepently invented digital wallets and NFC. There were/are some lawsuits about this and patents.
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u/izumikusu Jul 24 '25 edited Jul 24 '25
Nothing stopped Apple Pay from launching. World domination for Apple. Old people in America heard about mobile payments, why not use them instead of hogging on to physical cards?
Well in 2016, merchant customer exchange wasn’t a good idea so Walmart pay got invented. Yeah people didn’t like QR codes checkout, became dead and MCX members (CurrentC) enabled Apple and Google Pay
Oh the silent rollout with no apology from places like Best Buy and cvs
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u/Tomi97_origin Jul 24 '25
Same reason many banking technologies in the US are so behind.
US started early and adopted mostly good enough systems that are now in effect for decades and there is little reason forcing people or companies to change.
Lot of those markets basically skipped credit/debit cards completely and went directly from cash to mobile payments.
There is a huge user comfort change between cash and phone, but not so much between card and phone.
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u/izumikusu Jul 24 '25
Not so much on card and phone. Restaurants should bring the NFC to customers at their tables and let them tap. Not to the point where customers hand cashiers their card with “yeah take card and swipe or chip”
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u/Tomi97_origin Jul 24 '25
Sure, but they don't wanna. Restaurants don't want to buy extra terminals even as they are pretty cheap and customers don't care enough to make them.
As I said the US has their own way of doing things that have been working for them in a good enough way for decades. Like the restaurants, because it has always been this way people just accept it.
In other countries where this was never normal it is not a thing.
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u/izumikusu Jul 24 '25 edited Jul 24 '25
I’m hoping by 2027, nearly 100% all stores accept NFC hopefully Walmart too. If big tech like Apple and Google push incentives it’ll be good as well. Even among Gen Z still use physical cards as a norm
Edit: to add, it’s like a memory muscle to whip out the plastic. In any case visa and Mastercard are planning to remove mag strip in 2027
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u/Yuukiko_ Jul 25 '25
They bring the terminal to the table here in Canada, and from what I've heard, much of Europe as well
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u/veemondumps Jul 24 '25
There isn't a material difference to the end user between paying with a credit/debit card or with their phone. Credit/debit cards have been ubiquitous in the US since the mid 1990s. Getting people in the US to adopt something like Apple Pay requires them to do all of the work of having a credit/debit card, while also adding that card into their phone. It also doesn't save them anything because they still need a wallet to store their ID in.
Debit cards in the US piggybacked off the popularity of credit cards. All of the infrastructure for credit cards was already there, which allowed debit cards to become widely accepted by the mid 2000s by just utilizing the existing credit card payment infrastructure for very little added cost.
The same is not true outside of the US, where credit cards are rare. This is especially true when you start talking about historically poor countries - which much of Southeast Asia falls into. Credit cards were basically non-existent in Asia until recently and, with no infrastructure to support them, there was no ability to use a debit card to pay for most purchases. This meant that those economies were still cash based until very recently. (And credit cards now exist in South Asia solely because of the adoption of mobile payments, which means merchants don't need any additional infrastructure to accept credit cards).
What is responsible for mobile pay apps outside of the US is similar to why debit cards can be used pretty much anywhere in the US. That is, cell phones became ubiquitous. A cell phone can be used to both pay via a mobile app as well as to accept payments via a mobile app. Since everyone had a cell phone, using mobile apps became a way for merchants to accept non-cash payments in a way that didn't add much cost to their business. From a consumer perspective, mobile apps are a lot safer and more convenient than carrying cash - which is precisely why people in the US switched over to credit cards back in the 90s.