Cash is No Longer King in China: Physical Money is Slowly Becoming a Thing of a Past in China
Cash is no longer king in China! It is slowly becoming obsolete. Despite this factor, China's central bank warned that rejecting cash as the mode of payment is illegal. It could also cause people to lose confidence in paper money and is discriminating towards those who aren't accustomed to electronic payments. But the fact remains that mobile payments have surged to over $5 trillion in mainland China.
With more and more restaurants, tea houses, and shops moving towards only accepting mobile payments or QR codes such as Alipay, people from the rural areas, the elderly, and foreign visitors who have no access to these payment systems are finding it difficult to make a purchase with physical money. Not only that, even the wet markets (markets selling fresh meat) in China now accept mobile payments. For foreign visitors, it is recommended to download Alipay and then users can add an international credit card. Link a card that offers cash back and no foreign transaction fee, because it is likely that one will need to use a card for most transactions in China.
The influence of mobile wallets is more in the major Chinese cities where physical money is all but dead. Hema is one of its finest examples. It is an ultramodern supermarket chain in China opened by Alibaba Group Holding that specializes in fresh food. They pitched the new concept as a new experience for the customers that combine online and brick-and-mortar shopping. With Hema, customers can go online to have fresh foods delivered or can buy them at the stores.
However, there's a catch! The customers could only pay using Alipay. Although it saved money on cashiers, retailers refused cash spreads. As a result, authorities intervened and Hema stores were required to install cash registers.
Nevertheless, customers and business owners, among others are supporting the nation's rapid pace of digitalization, since digital and electronic payments like QR codes and credit cards are helping businesses grow and thrive while helping customers save spare money.
Considering the scenario, financial institutions are offering e-payment services to customers with additional benefits to encourage them to be part of this digitalization.
The influence of digital wallet has impacted citizens so much so that a recent study reported 98% of the population in urban areas use their smartphones for paying and accepting money.
The growing popularity of cashless payments has led to some outlets and businesses stop accepting physical money altogether.
This has caused the older adults and those who don't have access to such technology difficulty in making payments at the grocery stores and eateries. Considering this fact, the People's Bank of China announced that legal actions would be taken against businesses that refuse to accept cash.
Irrespective of that, people instinctively reach for their phone to settle their taxi fare to ordering meals, making purchases at the grocery store to booking high-speed rail tickets, and more.
Even shopping online, whether ordering Waimai (delivery) or on Taobao, the default payment options are Alipay accounts and Wechat Pay, and not cash or card. Additionally, people have reported that vendors often point to their displayed QR codes when seeing the customers with Yuan in hand.
Consider this information if you plan on travelling to China, and be prepared for any future transaction.
