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In a stunning twist, China, the global leader in digital payments, is hitting the brakes on its rapid transition to a cashless society. The mighty renminbi is reclaiming its throne, as Beijing implements measures to make cash payments easier amidst mounting difficulties faced by tourists and elderly citizens in navigating the country’s dominant digital payment landscape.
For nearly two decades, Liu Yau-li has guided tourists through China, witnessing firsthand the nation's evolution from cash transactions to a digital payment empire. However, as Alipay and WeChat Pay became ubiquitous, foreign visitors have found themselves lost in a labyrinth of QR codes, facial recognition, and fingerprint scanning, often hindered by the need for a Chinese bank account or extensive identification for foreign accounts.
"China's digital payment system is unrivaled," says Prof Sun Baohong of the Cheung Kong Graduate School of Business, "but its penetration is not universal, leaving the elderly and technologically challenged struggling."
Recent months have seen a seismic shift. State media once celebrated China’s march towards a cashless future, reporting cash usage had plummeted to a mere 3.7% of total money in circulation. Now, the government is pivoting, issuing a slew of directives to enhance financial inclusivity.
The People's Bank of China (PBOC) and the State Administration of Foreign Exchange have spearheaded efforts to make financial transactions more accessible for tourists and elderly citizens. Measures include boosting businesses and ATMs accepting foreign cards, broadening foreign e-wallet acceptance, and easing ID requirements for low-threshold transactions.
Shanghai has introduced taxis accepting foreign-issued credit cards, with plans to expand from 50 to 2,000 vehicles by November. Retailers in key districts are now mandated to accept foreign payments and cash, ensuring everyone can partake in the economic activity.
"This directive is a significant step towards inclusive finance," asserts Prof Sun. "It's not a reversal but an acknowledgment of gaps in the system, aiming for a seamless integration of technology in consumer journeys."
Despite these efforts, Liu remains cautious. "Policy promotions are in place, but their effectiveness is yet to be fully realized," she notes.
As China recalibrates its digital ambitions, the power of cash is being reaffirmed, ensuring no one is left behind in the world’s second-largest economy.
Source: https://www.theguardian.com/world/2024/apr/29/china-slows-cashless-society-transition-cash-digital-currency-mobile-payment-system
