Before using “sharing economy” services such as bike-sharing or power bank rentals in China, customers are often required to put down a deposit, which can range from 100 yuan to several thousand. The system can be problematic, as thousands of furious users recently discovered when they were unable to withdraw their deposits after car-sharing firm Ezzy and bike-sharing start-up BlueGoGo went out of business. But Ant Financial thinks it may have solved the problem using its social credit-scoring system, Sesame Credit. The financial arm of Alibaba said it will invest 1 billion yuan (US$151.8 million) in helping companies go deposit-free, according to Sesame Credit’s general manager, Hu Tao. Alibaba owns the South China Morning Post . Sesame Credit is Ant Financial’s proprietary credit-scoring system and an attempt to give its Alipay e-wallet users a credit score in a country where less than a third of the population have an official credit history. Users are given a Sesame Credit score based on their spending habits, the friends they have on Alipay, and whether they fulfil their financial obligations on time. For example, users who provide information such as their education history and driving licence, and pay their bills on time with Alipay, may be awarded a better score than users who provide no personal data and are late with bill payments. Technology rival Tencent has started testing its own credit-scoring service, which calculates scores based on data collected largely through its WeChat and WeChat Pay platforms. Companies like bike-sharing start-up Ofo already allow users with a score of at least 650 on Sesame Credit to rent its bicycles deposit-free. Beijing car-sharing firm Ezzy crashes, leaving customers fuming and out of pocket With its 1 billion yuan commitment, Ant Financial hopes to encourage more firms to do the same, as it claims this practice not only protects consumers but also increases business for the companies themselves – a win-win situation, according to Hu. For companies that agree to let users with a good Sesame Credit score use their services without a deposit, Ant Financial may invest in insurance schemes to help protect the firm in the unlikely event that the user does not return the product rented, according to the company. Ant claims that firms who have already adopted this model have seen a spike in business. Power bank rental firm Jiedian has seen rentals jump six times since it started allowing users with a Sesame Credit score above 600 to use its services deposit-free. Only 0.014 per cent of users failed to return the power banks within seven days, according to Ant. eHi Car Services, a car rental company that waives the deposit for anyone with a score above 650, has seen its car-loss rate fall from 3.1 per thousand rentals to just 1.8 per thousand rentals. By not taking deposits from users deemed trustworthy, this same group of people is more likely to try out a company’s services and is also more inclined to behave responsibly since any delinquent behaviour will affect their score. Ant said in a statement that on top of providing more support to merchants who are willing to rely on Sesame Credit and go without deposits, the billion yuan investment will also go towards developing better risk controls, insurance and credit as well as an incentive and penalty system. Outside so-called sharing economy firms, the deposit-free model can also be applied to industries such as apartment rentals and hotels, Ant said.