Chinese Payment Platforms Present Risk and a Reciprocity Gap

The increasing presence of Chinese payment platforms in the U.S. market raises significant concerns for the United States, particularly around three risks: economic competition, censorship, and national security.

In the late 2010s, Chinese payment platforms made quiet inroads into the U.S. market. These platforms act as digital wallets that facilitate transactions by linking consumers, merchants, and financial institutions, often bypassing traditional credit card networks. In 2017, JPMorgan Chase integrated Alipay into its merchant network. In 2018, 50 U.S. retailers, including Uber, Nike, and Nordstrom, began offering WeChat Pay as a payment platform. By 2019, Walgreens made Alipay available at nearly all of its U.S. stores.

Meanwhile, U.S. payment platforms face access barriers in China. Apple Pay must comply with specific software requirements, and Google Wallet is unavailable. These platforms do not encounter similar restrictions in other major global markets. Similarly, U.S. credit cards have struggled with decades of regulatory hurdles in China, despite a 2013 World Trade Organization victory challenging China’s restrictions on foreign banking.

Chinese payment platforms are limited in the United States as well. Alipay and WeChat Pay cannot be used to transfer money to U.S. bank accounts, nor for peer-to-peer transfers between U.S. users. Yet these restrictions are because Alibaba and Tencent, the companies behind the platforms, designed the platforms with these limitations. On the other hand, the Chinese government explicitly regulated PayPal’s usage in China so it can only be used for international transactions.

In the case of credit cards, China has made small concessions in recent years. China’s central bank formally allowed American Express to form a joint venture with a Chinese company in 2020, and later approved Mastercard in 2023. China’s government has yet to grant Visa the same permission. In June 2024, the CEO of Mastercard’s joint venture emphasized that the company was working toward integrating Chinese payment platforms—such as Alipay and WeChat Pay—into the global Mastercard network “at home and abroad.” As a result, Chinese payment platforms can expand their international acceptance while gaining deeper integration with global financial infrastructure.

Chinese payment platforms also present a censorship risk. WeChat Pay’s documentation lists politically charged violations as misuses of the platform, including actions that “endanger national security, leak state secrets, subvert state power, or undermine national unity.” WeChat could potentially use these terms to block transactions and exert foreign influence over U.S. individuals. For example, WeChat could block payments to U.S.-based organizations critical of the Chinese government, thereby exerting pressure on political expression abroad.

Chinese payment platforms also present national security risks for U.S. consumers. While public debate over TikTok has centered on the risks of a Chinese-owned social media app harvesting personal preferences and influencing speech, Chinese payment platforms offer a window into Americans’ real-world behavior, not just their online interests. Alipay and WeChat Pay process purchase histories, device locations, government IDs, health data, and biometric markers.

A 2024 academic analysis of the user agreements of Alipay and WeChat Pay reveals significant concerns about the platforms’ data governance structures. Although these platforms claim to comply with U.S. privacy laws like the California Consumer Privacy Act, they retain discretion over data collection, retention, and international data transfer. WeChat Pay’s user agreement, for instance, requires conflicts or disputes be resolved under Chinese law and in China. This would not be possible for a U.S. company in China. This is a security vulnerability, as China’s government can compel companies to share data in compliance with its National Intelligence Law.

China is not only interested in expanding its payment systems in the United States but also in establishing a global standard for electronic payments. In 2019, He Qiang, a Chinese academic with ties to government policymaking, called for the establishment of a “Chinese standard” for mobile payments internationally. This reflects China’s broader strategy to make its payment platforms an integral part of the global financial infrastructure, potentially sidelining U.S.-backed alternatives in markets worldwide.

Currently, Chinese payment platforms’ U.S. user base likely consists of Chinese citizens living or traveling in the United States and U.S. citizens who travel to China. However, Alipay recently launched a server that enables artificial intelligence (AI) developers to seamlessly integrate payment services into applications. This development shows how these platforms could, in the future, become more embedded in the broader U.S. digital ecosystems.

The status quo continues to expose U.S. consumers to growing risks as Chinese payment systems expand. But the solution is not a blanket ban, which was proposed during the first Trump administration and later revoked by the Biden administration. Around the world, countries such as India have banned Chinese payment platforms, but a blanket ban by the United States would also raise trade tensions and not address the reciprocity issue. A ban would also harm Chinese Americans, who use Chinese payment platforms for remittances; WeChat Pay and PayPal recently partnered to launch a financial product for this purpose.

China’s failure to provide reciprocal market access puts its practices in the crosshairs of the February 2025 Trump administration Executive Order (EO) that pledges to impose tariffs and “other responsive actions necessary to mitigate the harm to the United States” when foreign governments engage in discriminatory regulation against U.S. companies. The EO also directs U.S. government agencies to investigate foreign government policies involving the use of U.S. products or services that “undermine freedom of speech,” which would implicate WeChat Pay due to its documentation’s political language on misuse.

To address the growing risks that Chinese payment platforms pose, the Trump administration should adopt a reciprocity-based framework that combines fair competition, consumer protection, and national security. In 2021, the Consumer Financial Protection Bureau (CFPB) announced it would investigate “the practices” of Chinese payment platforms, but never made public any follow-up regulatory action.

The Trump administration should revisit this initiative and require public disclosure of the findings. For next steps, the Trump administration should use its February EO to enforce market reciprocity: If U.S. platforms continue to face regulatory restrictions and limited market access in China, Chinese-backed digital wallets like Alipay and WeChat Pay should not be granted unfettered access to U.S. markets.

The Federal Trade Commission (FTC) should assess whether platforms like Alipay and WeChat Pay's data practices violate U.S. privacy norms or involve deceptive practices. The FTC should require them to disclose critical information about their data practices: Where consumer data is stored, who has access to it, how long it is retained, and whether any data is subject to Chinese legal oversight. Only with these measures in place can U.S. regulators ensure that foreign payment platforms are operating transparently and consistently with U.S. privacy and national security standards.

If Chinese payment platforms gain a larger foothold in the United States, the risks to economic competition, individual freedoms, and national security will only grow. By implementing measures that ensure Chinese payment platforms are held to the same standards as U.S. payment platforms in China, U.S. policymakers can safeguard consumer privacy and national security while maintaining a fair playing field for U.S. businesses abroad.