This chapter discusses the interaction between the multiplicity of existing digital payment means (cards, apps, etc.), and the common element that all of them settle on bank and central bank ledgers. The combination of the two is discussed using a metaphor: a tree that has roots well planted in the soil (the central bank) and a top that divides itself into main branches (private depository institutions) and smaller twigs and leaves (payment cards, apps, platforms). A broad description of the existing payment universe is given, explaining how the different instruments work. The existing system essentially amounts to one in which payments are still made by banks, but their technical implementation is outsourced to other entities, belonging to the fintech sector. This leads to the conclusion that the alleged payment “revolution” is actually an “evolution”: Forms change but the elements that ensure the solidity and reliability of the system are unchanged. Finally, we provide an overview of the costs of different payment tools (cards, apps, platforms): both their overall cost and the way that cost is divided between service providers and users.

This chapter traces the incredibly rapid expansion of the platform e-commerce and financial conglomerates Alibaba and Ant Group. It shows how they took advantage of government fragmentation and dependence on the private economy to attract huge foreign investment, using the variable interest entity (VIE) legal loophole, and then to diversify into payment services (Alipay) and finance in conjunction with state financial institutions, attracting hundreds of millions of customers and tens of millions of SME merchants. The chapter analyzes the key struggles between this Alibaba/Ant "corporate ecosystem" and government regulators seeking to protect consumers, finding that reports of a reining in of Chinese private firms by the Chinese Communist Party are premature.

This chapter demonstrates the extent of the data protection problems in China, and the public’s growing concern about loss of privacy and abuse of their personal data. It proceeds to show that under China’s Cyber Security Law, the government has responded to this issue by strengthening ‘data protection’ from abuse by private companies but without shielding ‘data privacy’ from government intervention. In particular, enforced real-name user registration for online services potentially allows the Chinese government to demand access to the local data of any person who uses an online service in China, for national security or criminal investigation purposes. The chapter argues that this internal contradiction within the Cyber Security Law – increased data protection while demanding real-name user registration – may also benefit AI development. This is due, in part, to the vagueness of key terms within the Cyber Security Law, and the accompanying fuzzy logic within the Privacy Standards issued under that law, which allow both tech firms and government regulators considerable discretion in how they comply with and enforce data protection provisions. In the final part of the chapter, it is argued that due to the potential benefits of AI in solving serious governance problems, the Chinese government will only selectively enforce the data privacy provisions in the Cyber Security Law, seeking to prevent commercial abuse without hindering useful technological advances.