Social credit fears will taint China's Sesame Credit

Subject

Ant Financial's Sesame Credit rating service.

Significance

Foreign commentary often confuses Sesame Credit -- a voluntary credit-rating service for users of e-commerce giant Alibaba -- with the social credit systems the government has established to punish illegal and anti-social behaviour. However, the two systems function in different ways, have different objectives and use different data.

Impacts

• Foreign firms in China can benefit from using Sesame Credit to assess trustworthiness and creditworthiness, or for identity brokerage.
• Far from developing into an ever more all-embracing and ubiquitous system, Sesame Credit’s growth has probably plateaued.
• Controversies around data privacy and the non-disclosure of Sesame Credit’s algorithms indicate that Chinese users care about these issues.