It took Alipay 15 years to solve this problem, which is equivalent to creating ten Alipays.

I saw a news today that the number of patent applications filed by Alipay has surpassed that of Amazon and Facebook. Among the patents it has applied for, 1/3 are related to trust, mainly in the fields of payment, blockchain, privacy protection, data security, etc. Among them, innovations such as guaranteed transactions, fast payment, barcode payment, and pay first and pay later have reshaped the cornerstone of trust for China's commercial society.

I remember a few years ago, I interviewed Ni Xingjun, the current president of the Alipay business group. This Alibaba partner who was born as a programmer was also the technical director of Alipay at that time. I was impressed by what he said at that time, "When Alipay was first established in 2004, the most pressing problem was not the technical problem or the product problem, but how to solve the problem of trust."

It now seems that the problem that Alipay spent 15 years to solve has much greater social value than Alipay itself.

Taobao in 2004 was, to be exact, a local trading platform. Buyers would only place orders online with local sellers, and then make appointments with sellers at a certain time and place to exchange money and goods in person.

At that time, it had only been 25 years since the special era in China when trust between people was devastatingly destroyed, and less than 10 years since supermarkets first entered China and goods were frequently stolen and damaged.

Face-to-face cash transactions are the most mainstream method. Even so, all hospital cashiers and bank counters still have signs saying, "Cash must be counted in person, we are not responsible after leaving the counter."

In the face of the reality that trust is so fragile, who dares to believe that two strangers in different space and time can conduct a transaction?

It can be said that as pioneers of e-commerce, eBay is equivalent to installing a basin directly on the existing sewer system, while Jack Ma had to dig the sewer system before installing the Taobao "basin".

The essence of the "sewer system" is to establish a trust mechanism.

From a technical perspective, the "secured transaction" pioneered by Alipay does not have much technical content, but it has easily solved the trust problem by changing the transaction process: Alipay acts as a third-party guarantor, and the money paid by the buyer will first stay in Alipay. The money will only be transferred to the seller's account after the buyer has received the goods and confirmed that he is satisfied.

The theoretical mechanism problem has been solved, but the reality is that there are still many mountains of trust waiting ahead: As a private enterprise in an unknown second-tier city, why should we believe that you can be a good third-party guarantor?

According to Alipay's public historical records, the first transaction was a tortuous one. In October 2004, a buyer from Xi'an wanted to buy a second-hand digital camera from a seller in Tokyo. The money had already been transferred to Alipay, but he soon changed his mind. The customer service staff made several calls, saying "If there is a problem, I will use my salary to compensate you", and finally managed to close the first transaction.

The first transaction number of Alipay has been posted in the lobby on the first floor of Alipay’s headquarters in Hangzhou Huanglong Times Square.

This order, a milestone in China's e-commerce, took a whole day to complete. Fifteen years later, more than one billion packages were shipped on Singles' Day alone.

It has to be said that China's e-commerce has continued to prosper for more than ten years. One e-commerce platform after another has become a unicorn or gone public in just a few years. The micro-businesses selling facial masks and cosmetics on WeChat all have Jack Ma to thank.

Recently, a top international academic conference was held in Hangzhou, with many Nobel Prize winners among the guests. Professor Hanming Fang of the Department of Economics at the University of Pennsylvania said in his keynote speech that Alipay's greatest social contribution is to help China's business community rebuild a trust mechanism.

If Alipay's innovation from 0 to 1 only stops at guaranteed payment, it is far from "helping China's business community rebuild the trust mechanism", because even now, e-commerce accounts for less than half of the consumer sector.

Alipay's early employees celebrated the first transaction at Hangzhou Lakeside Garden

Over the past 15 years, the innovations that Alipay has continuously introduced have begun to drive each other like interlocking gears, turning faster and faster. It has broken through and solved the trust problems one by one, involving more and more business scenarios and people, and becoming more and more systematic.

For example, another milestone innovation of Alipay, "Quick Payment", was born in 2010. The core problem it solved was that the payment success rate was too low. At that time, using Alipay to pay was far less convenient than it is now. After verifying your identity, you had to jump to several pages to complete the payment, and the payment success rate was only 70%. Compared with the lightness of "secured transaction", "Quick Payment" relies on the heavy model of the iron army of the Zhonggong back then. The so-called "quick" is to directly connect the Alipay account and the bank account. The key point of the breakthrough is to convince the bank to agree.

In order to achieve its goals, Alipay used all means regardless of cost. According to public historical records, in order to gain support from banks, Alipay promised that as long as banks opened interfaces to Alipay, Alipay would provide banks with deposits or prepaid service fees. This was equivalent to letting banks lock in profits in advance, and if risks arose, Alipay would bear the consequences.

After opening the bank interface, Alipay's payment success rate quickly increased to 95%, which greatly stimulated the popularization of mobile payments and broadened the usage scenarios of mobile payments. The explosive development of third-party mobile payment platforms such as WeChat also directly benefited from this.

Following closely behind are barcode payment, QR code payment, etc. Regarding the value of QR code payment, perhaps most people only see that it drives mobile payment from online to offline quickly, but its deeper value lies in that it digitizes offline business operations and establishes credit profiles for offline merchants, especially small shop owners, who are the "capillaries of China's commercial society", so that they have the opportunity to obtain financial services.

Souvenir stalls on the streets of Lhasa

Take the example of a Shaxian snack shop owner. This post-90s man named Chen Rang found that the more he used the payment code, the higher his credit score would be, and the more benefits he could get, such as being able to borrow more money and repay it at any time; he could buy more on credit, and when he opened the third Shaxian snack shop in Nanjing, Chen Rang's credit limit reached 120,000 yuan; he also had free outpatient insurance. Once he went to the hospital for acute pharyngitis, he uploaded the hospital invoice with his mobile phone and received a reimbursement of 111.7 yuan on the same day.

It is not just the "capillaries" that benefit. In his 2018 New Year's Eve speech, Luo Zhenyu, the founder of Duoduo, mentioned a phenomenon that many star companies have emerged in the catering industry in the past two years and have been listed one after another. The reason behind this is that offline electronic payment makes every income of the catering industry traceable, verifiable and trustworthy. This credit can be expanded to the entire capital market, thus becoming the digital cornerstone of credit in multiple industries.

In the past two years, Alipay has deployed blockchain technology, which is a nuclear-level trust solution. The nearly 40 scenarios in which it has been applied so far are all aimed at solving the trust mechanism, such as tracing the source and use of charity donations; tracing the source and circulation of milk powder, rice and other commodities; putting electronic invoices on the chain and raising the cost of counterfeiting bills to the point where they cannot be counterfeited.

Here is an interesting story. In recent days, an entrepreneur who does digital product rentals shared his views at an entrepreneurial salon in Hangzhou. Their biggest attraction to users is that they do not require a deposit. After the deposit is waived, the platform's default rate has dropped from 0.5% to 0.15%. The reason is that they have connected to Alipay's blockchain technology and given each digital product an identity card that can be traced throughout the entire process. If a transaction dispute occurs, the Internet Court can collect evidence on the chain and conduct an online trial.

An Alipay engineer at the scene responded that they have been waiting for the first trial of rental breach, but it has not come yet. In the past, there were several cases where users who breached the contract quickly returned the rented items after receiving the court notice. "We can't make breach of trust disappear, but we can increase the cost of breach of trust to the point where breach of contract cannot be borne."

The following data is worth paying attention to: So far, Alipay has waived 100 billion yuan in deposits for 38 industries, and the market size of the new rental economy has exceeded 10 trillion yuan.

The significance of Sesame Credit is self-evident. What I want to talk about here is that I interviewed a customer service manager of Alipay some time ago. She mentioned an interesting new phenomenon. In the past, users who called the customer service hotline mainly encountered payment problems. In the past two years, more and more people have come to consult questions such as "I lost the power bank I rented, will it affect my credit score?" "I bought everything at home on Taobao, why does my mother's credit score higher than mine?"

This phenomenon reminds me of a Dutch merchant ship hundreds of years ago, which was commissioned by a customer to go to China to exchange porcelain. On its way through the Arctic Ocean, it was blocked by ice. Among the cargo were winter clothes and medicines, but the crew did not touch them until they died.

This behavior and reputation of valuing credit above life helped the Netherlands occupy the world market in maritime trade and establish the world's earliest financial system.

This brings us back to the origin of the question: why do we need to establish credit? Because credit is the cornerstone of the birth of finance and the pillar of modern business.

Continuing with this logical framework, Alipay's contribution to China's business community is not that it has provided a mobile payment tool, nor that it has more technical patents than Amazon. Its most fundamental contribution is that it has reshaped the credit mechanism for China's business community.

It is said that Jack Ma once asked everyone this question at an internal employee meeting of Alipay: Many years later, if this company no longer exists, what will remain?

We have reason to believe that, hundreds of years from now, people may no longer use Alipay, but they will definitely still use the trust it has built, just as we are still wearing clothes invented more than 100,000 years ago, eating rice domesticated more than 10,000 years ago, and using porcelain invented more than 3,000 years ago.