Should you be wary of Chinese payment apps?

Chinese mobile payment apps are a threat to national security, but Western financial companies are rushing to embrace them without realizing it.

In a report published by the American "foreign policy" magazine, writer Elizabeth Brau said that paying with bank cards is easy, but it is not the best option for merchants because of the annoying fees.

Imagine if consumers instead used mobile payment apps that charge much lower fees, like the apps that are taking over the world led by Chinese giants Alipay and WeChat Pay.

Last month, JPMorgan Chase Bank announced its intention to partner with Alipay, and this partnership would provide much of the data that the Chinese government wants access to, and this means that using these applications to buy coffee or groceries and other everyday items It could become a national security risk.

The total number of users of “Alipay” and “WeChat Pay” is about one billion users, most of them are from Asian countries, and providing this service to the Chinese in Europe - whether residents or visitors - is a smart strategy, especially since the number of Chinese tourists abroad has almost tripled, To reach 155 million tourists between 2010 and 2019.

Pay through apps

Last year, Alipay and WeChat Pay partnered in Italy with duty-free market operator Dufrey, and last month JPMorgan Chase announced it would partner with Alipay to process online purchases. The Internet is on Alibaba's online shopping site, meaning that US consumers' purchases will pass through Alipay.

Once merchants start using these apps, they are likely to like them because Alipay and WeChat Pay charge much lower trading fees than credit card companies, and although the services offered by PayPal are often cheaper than credit cards, they are available online. Only, for the user, using Alipay and WeChat Pay is as easy as using bank cards, Apple Pay or Google Pay, and by circumventing credit card companies (although they sometimes cooperate with them), my app appears to be Alipay and WeChat Pay will achieve tremendous growth.

Over the past month, it became clear that the Chinese government is planning to break up Alipay's parent company, Antgroup, and force it to hand user data over to a partially state-owned company. The question is: What user data can be exploited?

We know that Alipay collects health and fitness information, location, contacts, content, search and browsing history, and WeChat Pay collects similar data.

In contrast, apps in the West collect far more data than they should, but since 2017, when China passed a new national intelligence law, China-based companies are also obligated to help the Chinese government.

In other words, if Beijing wants to get detailed information about people in a particular country, it just needs to ask the Chinese companies whose services these people are taking advantage of.

In recent months, Beijing has proven its dominance in the technology sector, not only cracking down on Alibaba, but also reprimanding other big companies.

Beijing's actions should not surprise anyone because the sheer usefulness of the data makes it so valuable that it has been called "the new oil" for years.

In order to pump this oil into the 21st century, a team of the so-called People's Liberation Army hacked the US credit rating agency Equifax in 2017, and seized nearly 148 million US financial records.

With Chinese companies obligated to assist their local government, Beijing can collect data without resorting to illegal means (Shutterstock)

Personal data collection

These apps have made such hacks less necessary, and with Chinese companies obligated to assist their local government, Beijing can collect data without resorting to illegal means, which is important beyond the principle of users' privacy.

Indeed, government access to the data of citizens of other countries poses a national security risk.

According to Staffan Trophy, co-founder of threat intelligence firm Record Future, “The Chinese government may want to monitor data from foreign officials or business leaders to map their movements, and they can map the population in the same way Cambridge Analytica has used Facebook users.

In 2018, it was revealed that the British company, Cambridge Analytica, was collecting the personal data of tens of millions of Facebook users with the aim of influencing the 2016 Brexit referendum, the 2016 US presidential election, and various other elections.

Last August, the Chinese government passed legislation on data security that is scheduled to take effect in early November, but the Chinese Personal Information Protection Law prohibits companies from “unlawfully collecting, using, processing, transferring, disclosing and trading people’s personal data.” But it does not legally prohibit the collection of such data, nor its use by the Chinese government itself, and Western companies are likely to be covered by this law as well.

Before leaving office, US President Donald Trump banned Alipay and WeChatPay (and a group of small Chinese mobile payment apps) from operating in the United States, alleging that these applications posed a national security threat, and last June he canceled US President Joe Biden has banned the ban and replaced it with a more permissive vetting mechanism.

To be sure, the European Commission encouraged EU-based banks to develop their own payment system, but the banks lag far behind Alipay and WeChat Pay.

The collection of personal data is a recent tragedy. These applications help businesses and may sometimes be convenient for consumers, but they are too risky for democratic societies.

information feature

Western military institutions are increasingly debating the need for an “information advantage.” At a defense trade fair last September, the head of Britain’s Strategic Command, General Patrick Sanders, made clear that “we have to better understand, exploit, and manipulate data. The challenge we face is twofold. The data landscape is very complex and deals with the huge amount of information that could be available to us.”

That's exactly what China is doing with the help of naive Western consumers. Earlier this year, a US-based group sued WeChat, saying the app allows the Chinese government to monitor its users, including those outside China.

In general, Chinese applications are not suspicious by definition, but it is logical that the Chinese government wants to take advantage of applications that contain valuable information, and Beijing enters the company “Alibaba” in an indication of what will happen next, and this means that Western consumers need to develop their understanding In the field of national security and awareness of the danger that awaits them.