Why hasn’t the United States seen the emergence of products like China’s “Huabei” (Ant Check Later) or “Jiebei” (Ant Cash Now)?

Original｜Odaily Planet Daily（@OdailyChina）

Author｜Wenser（@wenser 2010 ）

Recently, Musk has once again released news about X Money, on one hand maintaining his consistent enthusiasm for "building another WeChat"; on the other hand, it also reveals the reality that the U.S. currently lacks an all-in-one payment platform like WeChat Pay or Alipay. This raises a question: Why hasn't the U.S., across the Pacific, developed large-scale micro-credit and consumer loan products like Huabei (Ant Credit Pay) and Jiebei (Ant Cash Now)?

Upon closer inspection, the truth is somewhat surprising. In the financial hotbed of the United States, a system of multi-layered barriers has stifled micro-loans that could have benefited millions of households, while allowing a high-cost, wide-coverage credit card ecosystem to continue its predatory practices.

The Brutal Reality of U.S. Financial Underbelly: No One Cares If You Have Money to Spend

In reality, the financially developed United States does have a demand for micro-credit.

According to the FDIC's 2023 survey data, approximately 5.6 million U.S. households are "unbanked" (about 4.2% of the population), and about 19 million households are "underbanked" (about 14.2% of the population). Furthermore, the Federal Reserve's 2024 Economic Well-Being report indicates that among adults earning less than $25,000 annually, 22% are unbanked; overall, 6% of adults (about 15 million people) are unbanked.

The primary reason these individuals 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." For many, banks are demonized vampires that only push and pressure them to repay loans. Approximately two-thirds of unbanked households rely entirely on cash for their daily transactions.

For those living at the bottom of the financial system, payday loans have become one of the few lifelines. Despite annual percentage rates (APRs) reaching as high as 400%, the payday loan industry had 12 million active users at its peak in 2014, originated around $46 billion in loans annually, and had over 1,000 service providers. In other words, these people can only borrow extremely expensive money. For major U.S. banks, they are "subprime users" with very low FICO scores, unable to even get a credit card – the lowest of the low.

On top of this, users of "Buy Now, Pay Later" (BNPL) services are in a slightly better position.

According to surveys, there were approximately 380 million BNPL users globally in 2024, projected to reach 670 million by 2028. In 2025, the number of BNPL users in the U.S. is 91.5 million, expected to reach 96.3 million in 2026. The GMV of the U.S. BNPL market in 2025 is approximately $122.2 billion, with a CAGR of 20.3% from 2021 to 2024.

For younger generations and primary consumers with strong spending desires and rapidly increasing purchasing power, the somewhat retro and lengthy process of credit cards is less appealing than the flexible, convenient, and zero-interest installment options of BNPL, which is thus gradually penetrating the market. However, compared to tens of millions of merchants globally and an even larger consumer base, this group is undoubtedly a niche. Of course, traditional financial institutions like American Express and Citibank have already launched similar BNPL installment features for their credit card holders, rapidly catching up.

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

In terms of first-mover advantage and network effects, Federal Reserve statistics show that 70%-80% of U.S. adults hold a credit card. By the end of 2025, outstanding credit card balances reached $1.28 trillion (New York Fed data, February 2026). The 175 million cardholders hold approximately 648 million cards, with an average APR of 22.3% (Q4 2025 data). Additionally, the average APR on newly issued cards is 23.75%. A CFPB report in 2025 noted that in 2024 alone, consumers paid a staggering $160 billion in credit card interest, a 52% surge from $105 billion in 2022. It's no exaggeration to say that credit cards are the largest legal predatory lending mechanism in the U.S.

Regarding cross-subsidization and compliance costs, statistics show that about 45%-50% of credit card holders pay their balances in full each month. For them, credit cards are a free short-term credit tool (with roughly a 25-day grace period), and they can even earn money through rewards and cashback. However, among cardholders earning less than $50,000 annually, 56% carry a balance month-to-month; this figure drops to 36% for those earning over $100,000. Conversely, over 27 million Americans can only make the minimum monthly payment, effectively paying interest rather than principal. This creates a paradoxical equilibrium in the U.S. credit card system: users who cannot pay in full subsidize the rewards and benefits of those who do pay in full, all at exorbitant annualized interest rates.

From both the supply and demand sides, this paints a brutal picture of the current U.S. financial industry: Some people can't get a credit card; some credit card holders are bleeding money to banks and other users; and some people prefer consumer loans over using credit cards. The reasons for this reality are undoubtedly complex and deep-seated.

America's Forgotten Internet Finance Industry: Regulation, Privacy, Capital, and Monopoly Control

Delving into the specific reasons why the U.S. lacks a booming internet finance industry like China's reveals a systemic and structural fortress with four main walls.

First is the stringent and fragmented regulatory system of the U.S. 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 means 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 tighter financial regulation. After the Dodd-Frank Act was passed in 2010, the Consumer Financial Protection Bureau (CFPB) expanded its authority, further increasing compliance costs and objectively eliminating the possibility for non-bank institutions to scale in the micro-credit space. To some extent, the U.S. regulatory system protects not the consumer, but the banks that profit from the status quo.

Second is the legal red line surrounding private data in the U.S..

Theoretically, U.S. 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, Apple knows what you use. However, the FCRA (Fair Credit Reporting Act, enacted in 1970 and repeatedly amended) strictly defines what data can and cannot be used for credit decisions. The CFPB pushed to expand the FCRA's scope in 2023-2024, bringing more data brokerage activities under regulation. California's CCPA and the subsequent CPRA add another layer of state-level privacy protection. These regulations mean that even if U.S. tech companies possess rich user behavioral data, they legally cannot directly feed this data into credit risk models. This is not a technical barrier; it's a legal red line.

Third is the capital market valuation penalty facing internet companies.

In the eyes of the never-sleeping Wall Street capital, internet tech companies become less attractive in terms of revenue and profitability once they link up with financial businesses. Tech companies have long enjoyed 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 create the Apple Card credit card business. 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 failure was partly due to Goldman's shortcomings in retail credit and risk management, a more important reason was Apple's reluctance to get deeply involved or assume credit risk.

Fourth is the control of credit pricing power by financial giants.

The core players in U.S. consumer credit are large 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 U.S. 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%). This vast credit empire is backed by immense financial power. Driven by system designs manipulated by banking lobby groups and entrenched consumer behavior patterns, the bitter pill of 22% credit card interest rates becomes an unavoidable reality.

In summary, the current reality of the U.S. financial industry is one where credit cards secured their position first, regulations blocked the path for alternatives, privacy laws cut off data support, Wall Street dislikes the valuation methods of financial businesses, and banking giants refuse to tolerate challengers threatening their authority and interests. All these factors have combined to effectively lock internet-based micro-credit, which could have benefited millions of individuals and small businesses, out of the U.S. market.