Why hasn’t the United States seen products like "Huabei" (Ant Check Later) or "Jiebei" (Ant Cash Now)?

Original｜Odaily (@OdailyChina)

Author｜Wenser (@wenser 2010 )

Recently, Musk once again released news about X Money, maintaining his consistent enthusiasm for “building another WeChat.” On the other hand, it also highlights the reality that the US currently lacks an all-in-one payment platform like WeChat Pay or Alipay. This raises a key question: why hasn’t the US developed large-scale small-loan products like Huabei or Jiebei?

Upon closer examination, the truth is somewhat surprising. In the fertile financial landscape of the US, a set of layered barriers has effectively blocked small loans that could have benefited millions of households, while allowing a high-cost, broad-coverage credit card ecosystem to thrive.

The Harsh Reality of US Finance: No One Cares If You Can Afford It

In fact, the US, despite its advanced financial industry, does have a demand for small loans.

According to the FDIC's 2023 survey, there are approximately 5.6 million “unbanked” households in the US (about 4.2% of the population), and around 19 million “underbanked” households (about 14.2% of the population). Meanwhile, a 2024 Federal Reserve report on economic well-being shows that among adults earning less than $25,000 annually, 22% are unbanked, and 6% of all adults (about 15 million people) are unbanked.

The primary reason these people don’t open bank accounts is simple: “Not having enough money to meet minimum balance requirements.” The second reason is “distrust of the banking system,” as banks are often seen as vampires that constantly pressure people to repay loans. About two-thirds of unbanked households rely entirely on cash for daily transactions.

For those at the bottom of the financial ladder, payday loans are often the last lifeline. Despite annual interest rates as high as 400%, payday loans had 12 million active users at their peak in 2014, with an annual lending volume of approximately $46 billion, provided by over 1,000 service providers. In other words, these people can only borrow extremely expensive money. For major US banks, they are “subprime users” with very low FICO scores, unable to even get a credit card—the bottom of the bottom.

On this basis, users of “Buy Now, Pay Later” (BNPL) services are slightly better off.

Surveys indicate that in 2024, there were about 380 million BNPL users globally, projected to grow to 670 million by 2028. In 2025, the US had 91.5 million BNPL users, expected to reach 96.3 million by 2026. The GMV of the US BNPL market in 2025 is approximately $122.2 billion, with a CAGR of 20.3% from 2021 to 2024.

For young people and major consumer groups with strong spending desires and rapidly growing purchasing power, BNPL’s flexible and convenient zero-interest installment options are more appealing than the somewhat outdated and lengthy credit card process, leading to a slow but steady penetration. However, compared to the tens of millions of merchants and even larger consumer bases globally, this group is undoubtedly niche. Of course, American Express, Citibank, and others have already launched BNPL-like installment features for cardholders, showing that traditional financial institutions are quickly catching up.

In contrast, the credit card system has leveraged first-mover advantages, network effects, cross-subsidization, and compliance costs to dominate the US market, reaping significant benefits.

Regarding first-mover advantages and network effects, Federal Reserve data shows that 70%-80% of US adults hold a credit card. By the end of 2025, outstanding credit card balances reached $1.28 trillion (NY Fed data from February 2026). There are 175 million cardholders holding approximately 648 million cards, with an average annual percentage rate (APR) of 22.3% (Q4 2025 data). The average APR for new credit cards is 23.75%. Additionally, a 2025 CFPB report notes that in 2024 alone, consumers paid $160 billion in credit card interest, a 52% surge from $105 billion in 2022. It is no exaggeration to say that credit cards are the largest legal predatory loan in the US.

In terms of cross-subsidization and compliance costs, statistics show that about 45%-50% of credit cardholders pay off their balance in full each month, using credit cards as a free short-term credit tool (with a 25-day interest-free period), and even earning cash back or points. Among cardholders earning less than $50,000 a year, 56% carry a balance monthly; for those earning over $100,000, this figure drops to 36%. Conversely, over 27 million Americans can only afford to make the minimum monthly payment, essentially paying interest rather than principal. This creates a bizarre equilibrium where users unable to pay in full subsidize those who do, through high APR costs.

Both the supply and demand sides together reveal the harsh reality of the US financial industry: Some people cannot get a credit card; some cardholders are fueling banks and others; some prefer consumer loans over credit cards. The reasons for this situation are undoubtedly complex and deep-rooted.

The Forgotten US Internet Finance Industry: Regulation, Privacy, Capital, and Giant Control

Delving into why the US lacks a thriving internet finance industry like China’s, it essentially comes down to a systemic, structural set of barriers.

First, the harsh, fragmented regulatory system of the US financial industry.

On one hand, the dual federal and state (50 states) regulatory framework creates extremely high compliance barriers for financial services. The fragmented regulation leads to non-linear increases in compliance costs for companies wanting to enter the lending business, resulting in a very low return on investment. On the other hand, the 2008 financial crisis provided strong support for tightening financial regulations. After the Dodd-Frank Act was passed in 2010, the Consumer Financial Protection Bureau (CFPB)’s authority expanded further, increasing compliance costs and objectively eliminating the possibility for non-bank institutions to scale in the small-loan space. To some extent, the US regulatory system protects not consumers, but the banks that profit from the status quo.

Second, the legal red lines around privacy data in the US.

Theoretically, US tech giants possess more comprehensive user privacy data and personal information than their Chinese counterparts: Amazon knows what you buy, Google knows what you search, Apple knows what you use—but the Fair Credit Reporting Act (FCRA, enacted in 1970 and amended multiple times) strictly dictates what data can be used for credit decisions and what cannot. The CFPB, in 2023-2024, pushed to expand the FCRA’s scope, bringing more data broker activities under regulation. California’s CCPA and subsequent CPRA add another layer of state-level privacy protection. These regulations mean that even if US tech companies have rich user behavior data, they are legally prohibited from directly feeding that data into credit risk models. This is not a technical barrier; it is a legal red line.

Third, the capital market valuation penalty for internet companies.

In the eyes of Wall Street, where money never sleeps, once an internet tech company ties itself to financial services, the appeal of its revenue, profitability, and business performance diminishes significantly—internet tech companies have long enjoyed high price-to-earnings ratios (asset-light, high growth, network effects), while financial companies suffer from lower market valuations due to heavy assets, strict regulation, and cyclicality. Previously, Apple partnered with Goldman Sachs in 2019 to launch the Apple Card, but it ultimately ended with Goldman Sachs suffering losses exceeding $6 billion, a charge-off rate of 2.93%, and the business being transferred to JPMorgan. While the lack of expertise in retail credit and risk management at Goldman Sachs played a role, the more important reason was Apple’s reluctance to get overly involved or assume credit risk.

Fourth, credit pricing power is concentrated in the hands of financial giants.

The core players in US consumer credit are major banks and financial groups like JPMorgan Chase, Bank of America, Citigroup, Capital One, and Wells Fargo. They control nearly all consumer credit product lines, including credit card issuance, personal loans, mortgages, and auto loans. According to statistics, total US consumer debt is about $17.86 trillion (Equifax data, June 2025), with mortgages at $13.21 trillion and non-mortgage debt at $4.65 trillion (comprising 36% auto loans, 28.5% student loans, and 24.2% credit cards). This vast credit empire is backed by immense financial power. Driven by the system designed with the influence of banking lobbying groups and ingrained consumer behavior, the 22% APR cost of credit cards has become a bitter pill that must be swallowed.

In summary, the current reality of the US financial industry is that credit cards secured their position early, regulation blocked the path, privacy laws cut off data support, Wall Street dislikes the valuation model of financial businesses, and banking giants do not tolerate challengers infringing on their authority and interests. All these factors have combined to effectively block internet small loans—which could have benefited millions of individuals and small businesses—from entering the US market.