Here in the U.S. we now have many industries with a long and storied history. It’s easy to find good examples of companies that have been around for a long time, such as BNY Mellon, which was opened by Alexander Hamilton back in 1784 – even before the US had a central bank. The White Horse Tavern in Rhode Island opened for business in 1673 and the Philadelphia Contributorship started insuring property in 1752.
This depth of experience and knowledge means that we have developed many world-leading industries in the U.S. American companies are known across the world in fields as diverse as banking, technology, and aviation. However, this sometimes leads to the very latest innovation taking place elsewhere because when a region or country has not had a particular type of service they can more easily start from a blank page.
Economists often call this “leapfrog innovation.” A classic example is countries that never really installed a reliable copper landline telephone network. When cell phones became available these regions often jumped at the chance to create comprehensive new mobile networks and never bothered with the development of a landline network.
We can see this taking place now in China with payments. Cash and checks are becoming less common in the US, but credit cards are still used by most people. In China it is already difficult to find shops that will accept your plastic – they have moved on to app-based payments.
Naturally this can make life difficult for tourists visiting China . If you are carrying cash and a wallet full of cards, then how do you buy any souvenirs when most retail stores will only accept payment using a phone app? Companies that attract tourists often accept these “old” methods of payment because many tourists would otherwise find payment impossible.
Payment apps really are essential today in China. WeChat has over 1.3 billion active users . It allows users to pay for products in-store or online and also to transfer cash to a friend or to pay for a service. Retail purchases usually use a QR code – scan the code and it has all the details of your purchase immediately.
But WeChat also offers messaging, news, and social media functions – it’s often referred to as “the everything app.” Users can search for products, buy and pay for them, and post about the purchase on their social feed all from within the same app.
Although the U.S. has recently developed new payment methods, such as Apple Pay and Google Pay, they still largely rely on connecting the user to an existing payment service – like a credit card. In addition, they exist as services that are separate to the major social networks. Although it is rumored that X (formerly Twitter) wants to eventually grow into an “everything app” it is not clear how quickly this will be developed or accepted by the public .
The big change in China has really been the leapfrog effect. It is not just that they are using apps for payment, the important point is that credit cards did not have a large enough user base for them to remain. As soon as this new and simple option became available, it was adopted, and most Chinese consumers would now consider the credit card to be an archaic and old-fashioned payment method.
This type of innovation can feel slower in the U.S. There is a longer history of payment services, so people are used to their cards, and there is no ‘everything app’ on offer at present. Meta does have the potential to develop WhatsApp beyond messaging alone as some regions already have payment services and shopping – you can find local stores that will accept orders via WhatsApp.
The Pix system in Brazil may also offer an interesting path forward as it doesn’t rely on any existing social media tools. The central bank created this payment protocol and mandated that all banks must offer it to customers. Every customer with a banking app can now use their phone to pay for products in-store or online or send cash to a friend without needing to know their bank details – a phone number is enough.
Whatever approach is adopted in the US, it is likely that people will continue to use cash and cards for several years. Change can take place eventually though. Apple Pay was only launched a decade ago and now over 45 million Americans use it regularly .
Payments innovation is developing rapidly in the US and sometimes it can be helpful to learn from what has worked well in other regions.
Embracing Strategic Partnerships for Future Payments Innovation The rapid pace of payments innovation in the US underscores the need for strategic partnerships. By leveraging financial services outsourcing with VXI, financial institutions can stay ahead of these changes and quickly adapt to new technologies. VXI’s expertise in human-centered design strategies ensures that every customer interaction—from banking and credit cards to payment transfers, loans, and wealth management—is seamless and satisfying.
Whether your customers are digital-native crypto investors or cash-first consumers, VXI’s empathetic and expert approach ensures they receive the best possible service. Partner with VXI to navigate the future of payments innovation and stay ahead of consumer preferences.
