China's Ant Financial deploys credit-worthiness scores


In 2015, Ant Financial, a Chinese company affiliated with Alibaba, began deploying "Sesame Credit scores". Ant, which also runs the popular payment app Alipay, claims that it uses both online and offline purchasing and spending habits to calculate a credit worthiness score for each of its more than 350 million users. Users who meet various thresholds qualify for bonuses such as small loans or waivers on deposits. Almost as soon as the system went live, users of popular social media apps such as Weibo and WeChat began posting their scores. 
Critics such as the American Civil Liberties Union have suggested that the Chinese government will use the scheme as the basis for monitoring citizens' finances and incorporate political views and "morality". It was not clear whether this was true. Though the Chinese government was developing plans for a social credit system, Ant noted that system was entirely independent from Sesame Credit. Ant also explained that Sesame Credit scores take into account five categories of signals: purchasing frequency and price; personal information such as employment and household registration status; timely payments on bills and credit cards; and the number of friends who also join Sesame Credit. Therefore, the score works more like a loyalty programme than a credit rating system, though this may change as more users join.

Writer: Zheping Huang
Publication: Quartz

Related learning resources