The government of the People’s Republic of China released Sesame Credit in the fall of 2015. To somebody who does not understand the Chinese language or culture, Sesame Credit would appear to be a regular credit scoring system. However, this credit scoring system, designed by Tencent and Alibaba, also rewards good societal behavior as well as sound financial decisions.
The Chinese government calls this system a “social credit score.” Connected to financial institutions and social media, it is free to use. It can track various activities users perform. Users are encouraged to support their communities on social media. For example, if users share positive news stories on social media or buy local goods online, their scores go up. If users import goods from outside the country or fail to pay a bill on time, their credit score goes down.
There are various rewards attached to having high scores. At 600 points, the user qualifies for a loan of up to 5,000 yuan (roughly $800 USD) when shopping on Alibaba or their affiliates. This loan increases to 50,000 yuan (roughly $130,000 USD) if the user has a score of 666 or higher. A score of 650 means the user can rent a car without paying a deposit, while a score of 700 can allow some paperwork to be skipped when applying for a Singapore travel permit. A score of 750 or higher lets the user obtain a Schengen visa without declaring their assets.
Although no penalties are imposed for having a low credit score, there have been talks of putting some in place. Possible consequences may include slowing down Internet connections, making loans more difficult to get, and limiting certain purchases on Alibaba. This will encourage users who are in debt to pay off their bills.
The social credit program is still new, so none of these policies are final. People have responded well to the program. The Chinese social media website Weibo has more than 100,000 posts in which users brag about how high their scores are. If this enthusiasm continues, every Chinese citizen could be connected to the network, spreading positivity throughout the country.