> Why hasn't US achieved the level of digital payment smoothness that China has been able to?

Because it already achieved that "level of digital payment smoothness" with credit cards?

> I think we need to be careful about attributing all of the China's success and splurge of VC funding to IP theft, hostile domestic market for foreign players, etc. China is succeeding because it really wants to.

> It's important to recognize China's technological prowess. They have similarly taken a lead in bioengineering.

I attribute it to having an authoritarian government that's not afraid to direct the economy. The US, on the other hand, has more-or-less adopted an ideology that specifically rejects that kind of government economic direction.

The way credit cards work in the U.S. is incredibly behind how they work in every other developed nation.

I studied abroad in New Zealand in 2004. Even back then, everything was chip-and-pin, with computerized machines at every merchant to take orders. I never had to hand my NZ bank card to a merchant, just insert it into an EFTPOS reader and enter my PIN. My American credit card needed a swipe, signature, and handover to the cashier, because unlike in the U.S, they actually checked signatures in NZ.

Meanwhile, in the U.S, we just moved to chip cards 2 years ago, and just yesterday I had a POS reader reject it for "chip malfunction - swipe instead". The major merchants just stopped collecting signatures last month, though cashiers have been ignoring the signature for decades now.

I blame the innovator's dilemma and first-mover disadvantage, like sanxiyn's comment mentions. The U.S. has a "good enough" system that everyone's adopted; it's not worth it to force everyone to adapt to a system that's a little better. Same goes for many other broken systems in the U.S. - electricity, measurement, public education, public transportation, health insurance, etc.

I haven't handed my card to a merchant in the states since I got back a year and a half ago. UnionPay card use was always annoying in China because in addition to your PIN, you would need to sign as well, it was like the worst of all worlds. I'm not really into QR either (tap via RF is the right solution), but it works better than what they had before.

> Because it already achieved that "level of digital payment smoothness" with credit cards?

Whether the two are equivalent depends on the transaction costs of the two models.

According to the Economist: "Visa and MasterCard extract over 0.10 cents of net income for every dollar of payments. Ant takes a smaller cut, of less than 0.03 cents." https://www.economist.com/news/business/21726713-ant-financi...

Perhaps more importantly I've seen estimates that Chinese banks lose $20 billion yearly in credit card fees due to the mobile payments.

> Whether the two are equivalent depends on the transaction costs of the two models.

I don't think we're not talking about exact, feature-for-feature, cost-for-cost equivalence.

Both these systems have the same or similar "level of digital payment smoothness" from the customer perspective. At least with credit cards, those fees are on the merchant side not part of the customer experience equation.

If one tries to pay when merchants don't eat the fees, e.g., paying real estate tax online where the county tax collector charges a 2+% convenience fee for credit cards, one definitely would see the difference. In other cases where merchants eat the fees, they are just passed on to the buyers, though many cards do rebate their holders part of the fees as "rewards".

> Why hasn't US achieved the level of digital payment smoothness that China has been able to?

This isn't unusual. Because of legacy issues, latecomers often enjoy superior infrastructure. For example, US is still on 110V despite all the disadvantages.

> For example, US is still on 110V despite all the disadvantages.

Could go into that? IIRC, 110V is less efficient but it's also less dangerous, so maybe it's more of a trade-off.

But your point stands. I've read that the reason Estonia's government infrastructure is so much more advanced than the US's is because they had visionary leaders and started from scratch in the 90s. The US has the weight of decades of good-enough paper processes weighing it down.

Ya, I miss the satisfying "pop" I get when plugging in to outlets in China without a ground pin.

"I think we need to be careful about attributing all of the China's success and splurge of VC funding to IP theft, hostile domestic market for foreign players, etc."

All of it? Clearly not. But it would be pretty disingenuous to claim that it's not related.

"With manufacturing in US hollowed out in last couple of decades"

The US is still the #2 manufacturer in the world.

"Why hasn't US achieved the level of digital payment smoothness that China has been able to?"

We've had credit cards for quite a long time.

but in the crucial area of consumer electronics, ie cell phones and computers, the us seems to be far behind asian manufacturing (china & taiwan). Perhaps because of cost, I doubt much is made in the us. A quick search reminded me that the us is still a manufacturing powerhouse, depending on metric probably number 2, but I couldn't find much about specifics on where things are manufactured. It's a complicated world with intel designing cpus, at least to a large part in the us, but making them to some extent in other places.

>The US is still the #2 manufacturer in the world.

It is a clear #3 by population, so I don't know how significant that statement is.

It's very significant, because the parent claimed US manufacturing had been hollowed out. That hasn't actually occurred.

The Fed's measurement of real manufacturing output is 70% higher than it was 30 years ago (the population is merely 1/3 larger).

Further, manufacturing is booming in the US. [1] In China it has been barely expanding for years, and that's despite China supporting their manufacturing base with vast state subsidies that have generated extreme over-production in things like steel.

The US has a perpetual cheap energy advantage over most of the rest of the world that is helping to spur that manufacturing boom. Natural gas prices are typically half that of the rest of the developed world or lower, as are electricity prices (US electricity costs are something like 35% that of Germany). Then throw on top the substantial corporate income tax cuts that will bolster manufacturing income margins.

The US outlook for manufacturing is brighter than it is for all other major economies. [2]

[1] https://www.marketwatch.com/story/ism-manufacturing-gauge-hi...

[2] http://fortune.com/2016/03/31/united-states-manufacturing-ch...

>I think we need to be careful about attributing all of the China's success and splurge of VC funding to IP theft, hostile domestic market for foreign players, etc

What, and not be racist? Where's the fun in that?

It's clear that Chinese scientists and engineers are inferior (except when they happen to immigrate and work in the US, then they're suddenly OK) /s