Zhima Credit, launched by Alibaba, has teamed up with 12 Chinese cities to pilot a system that gives a wide range of deposit-free services to consumers with sound online payment records.

Hangzhou, home to Alibaba's headquarters in east China's Zhejiang Province, launched the "Credit Hangzhou" app on Tuesday. The app aims to make it convenient for consumers to check their personal credit rating and search for deposit-free services.

"May all residents, workers, students and travelers with good credit records enjoy a convenient life with no deposit and prepayment in Hangzhou," said the municipal government's information office.

The Hangzhou municipal commission of development and reform said in two to three years, consumers with high credit records can enjoy a pay-later service for taking public transport including subways and buses, and deposit-free shared bicycle renting and hotel check-ins.

With the Zhima Credit function, added to Alibaba's online retail platform Taobao, credibility points can be gained when a user pays via Alipay. Zhima Credit requires users to fill in personal information including ID card or passport numbers, education level and occupation. The higher the points, the more deposit-free services they can make.

Hangzhou, Shenyang and Nanjing are three of the 12 cities piloting the social credit system.

In Hangzhou, 76 percent of the city's population registered for Zhima Credit. That is 7.2 million people, with 40 percent having had their credit points qualified to exchange for deposits.

Deputy CEO of Zhima Credit, Li Congbin, said the company would provide 1 billion yuan (156 million U.S. dollars) of supporting funds to encourage and insure businesses in the system to broaden the range of deposit-free services.

He said Zhima Credit was set to help waive 100 billion yuan worth of deposits by next year, ultimately aiming to exempt all deposits in the sharing economy.

From sharing bikes and cars, to phone chargers and clothes, the sharing economy has become one of the fastest growing sectors driving China's economic growth.

For most sharing businesses, a deposit is a must. To ride a shared bicycle, a customer must pay up to 300 yuan in deposit, although the rent fee is as cheap as 1 yuan for a 30-minute ride.

In Hangzhou, Zhima Credit has helped 3 million people exempt 740 million yuan in shared bicycle deposits, and 747,000 people exempt hotel pre-payment.