Why Hasn't the U.S. Seen Products Like "Huabei" or "Jiebei"?

Original｜Odaily Planet Daily (@OdailyChina)

Author｜Wenser (@wenser 2010 )

Recently, Musk once again released news about X Money, maintaining his consistent enthusiasm for "rebuilding a WeChat." On the other hand, it also reveals the reality that the United States currently lacks a one-stop payment platform akin to WeChat Pay or Alipay. This leads to a subsequent question: why hasn't the US, across the Pacific, developed large-scale credit and consumer loan products like Huabei or Jiebei (Alibaba's credit services)?

Upon closer examination, the truth behind this phenomenon is somewhat surprising. In the fertile financial landscape of the United States, a system of layered barriers has effectively blocked the path of small loans that could benefit millions, while allowing a "high-cost, broad-coverage" credit card ecosystem to continuously extract value.

The Cruel Underlying Reality of American Finance: No One Cares If You Have Money to Spend

In reality, the US, with its advanced financial industry, does have a demand for microcredit.

According to data from the FDIC's 2023 survey, there are approximately 5.6 million "unbanked" households (about 4.2% of the population) and around 19 million "underbanked" households (about 14.2% of the population) in the U.S. Furthermore, a Federal Reserve survey on economic well-being in 2024 indicates that 22% of adults earning less than $25,000 annually do not have a bank account, and 6% of adults (approximately 15 million people) are considered "unbanked."

The primary reason these individuals do not open bank accounts is simple: "Not having enough money to meet the minimum balance requirements." The second reason is "distrust of the banking system." For many, banks are demonized entities that only pressure you to repay loans. About two-thirds of unbanked households rely entirely on cash for their daily transactions.

For people living in these financial margins, payday loans have become one of the few lifelines. Despite annual percentage rates (APRs) potentially reaching as high as 400%, the payday loan industry had 12 million active users at its peak in 2014, disbursed approximately $46 billion annually, and was serviced by over 1,000 providers. In other words, these individuals can only borrow extremely expensive money. For large American banks, they are "junk users" with very low FICO scores who cannot even get a credit card – the bottom of the bottom.

On top of this, the demographic using "Buy Now, Pay Later" (BNPL) services is in a slightly better position.

According to surveys, there were approximately 380 million global BNPL users in 2024, expected to grow to about 670 million by 2028. In the U.S., the number of BNPL users was 91.5 million in 2025, projected to reach 96.3 million by 2026. The gross merchandise value (GMV) of the US BNPL market in 2025 was approximately $122.2 billion, with a CAGR of 20.3% from 2021 to 2024.

For young people and primary consumers with strong spending desires and rapidly growing purchasing power, the somewhat outdated and lengthy process of credit cards is less appealing than the flexible, convenient, and zero-interest installment options offered by BNPL. Therefore, BNPL is slowly penetrating the market. However, compared to the tens of millions of merchants and the massive scale of consumers globally, this group is undoubtedly a niche. Of course, traditional financial institutions like American Express and Citibank have launched "Buy Now, Pay Later" installment features for their credit card holders, showing they are quickly catching up.

In contrast, the credit card system, leveraging its first-mover advantage, network effects, cross-subsidization, and compliance costs, has flourished in the US, reaping significant benefits.

Regarding first-mover advantage and network effects, according to Federal Reserve statistics, 70%-80% of US adults hold a credit card. As of the end of 2025, outstanding credit card balances reached $1.28 trillion (data from the New York Fed, February 2026). 175 million cardholders hold approximately 648 million cards, with an average APR of 22.3% (Q4 2025 data). Additionally, the average APR for newly issued credit cards is 23.75%. A 2025 CFPB report indicated that in 2024 alone, consumers paid a staggering $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 product in America.

In terms of cross-subsidization and compliance costs, statistics show that about 45%-50% of credit cardholders pay their balance in full each month. For them, credit cards function as free short-term credit tools (with an interest-free period of up to 25 days) and can even generate income through cashback rewards. However, among credit cardholders earning less than $50,000 annually, 56% carry a balance month-to-month. This figure drops to 36% for those with annual incomes over $100,000. Conversely, over 27 million Americans can only afford the minimum monthly payment, effectively paying interest rather than principal. This creates a peculiar equilibrium in the US credit card system, where users who cannot pay in full subsidize those who can, through high interest rates.

Both the supply and demand sides together paint a grim picture of the current US financial industry: Some people cannot get a credit card; some credit cardholders are bleeding money to banks and other users; and some people prefer consumer loans over credit cards. The causes of this situation are undoubtedly complex and deep-seated.

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

Delving into the specific reasons why the US lacks a thriving internet finance industry like China's, it essentially comes down to a systemic and structural set of four high walls.

First, the stringent and fragmented regulatory system of the US financial industry.

On one hand, the dual federal and 50-state regulatory framework creates extremely high compliance barriers for finance. Regulatory fragmentation means that compliance costs for companies wanting to engage in lending often grow non-linearly, resulting in very low returns on investment. On the other hand, the 2008 financial crisis provided strong impetus for tightening financial regulation. Following the passage of the "Dodd-Frank Act" in 2010, the authority of the Consumer Financial Protection Bureau (CFPB) expanded further, increasing compliance costs and objectively eliminating the possibility of non-bank institutions scaling in the microcredit sector. To some extent, the US regulatory system protects not the consumer but the banks that profit from the status quo.

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

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

Third, a capital market valuation penalty facing internet companies.

In the eyes of Wall Street capital, which never sleeps, once an internet tech company ties itself to financial business, the attractiveness of its revenue and profitability metrics diminishes significantly. Internet tech companies have historically enjoyed the benefits of high P/E ratios (light assets, high growth, network effects), while financial companies are valued lower due to heavy assets, strict regulation, and cyclicality. Previously, Apple partnered with Goldman Sachs in 2019 to launch the Apple Card credit card business. It ultimately ended with Goldman Sachs suffering losses exceeding $6 billion, a bad debt rate of 2.93%, and transferring the business to JPMorgan Chase. While Goldman Sachs's shortcomings in retail credit and risk management contributed to the business's failure, a more critical reason was Apple's reluctance to get heavily involved or even assume credit risk.

Fourth, credit pricing power is held by financial giants.

The core players in US consumer credit are large banks and financial conglomerates like JPMorgan Chase, Bank of America, Citigroup, Capital One, and Wells Fargo. They control the issuance of credit cards and virtually all consumer credit product lines, including personal loans, mortgages, and auto loans. According to statistics, total US consumer debt is approximately $17.86 trillion (Equifax data, June 2025), comprising $13.21 trillion in mortgage debt and $4.65 trillion in non-mortgage debt (including auto loans 36%, student loans 28.5%, credit cards 24.2%). Behind this vast credit empire lies financial power rivaling that of nations. Driven by a system designed by banking lobbyists and consumer behavioral inertia, the 22% interest rate on credit cards has become a bitter pill consumers are forced to swallow.

In summary, the current reality of the US financial industry is that credit cards established dominance first, regulation blocked alternative paths, privacy laws cut off data support, Wall Street disfavors the valuation model for financial businesses, and banking giants refuse to tolerate challengers to their authority and interests. Together, all these factors have effectively shut the door on internet-based microcredit that could benefit countless individuals and small businesses, barring its entry into the US market.