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China is becoming a cashless society

China SCIO,08 10, 2017 Adjust font size:

"All the deals were made without cash," Zhou Chaoxuan, a cab driver from Didi Chuxing (a major Chinese ride-sharing company) in Beijing told on August 4. "People hail cars and pay on our app, much more convenient than before."

Zhou was introduced by his friends to take the job as a cab driver for Didi. Although it is his first year in the job, the 52-year-old driver has quickly adapted to the cashless lifestyle in Beijing.

"I believe cashless society is the future of China. I could take out phones instead of cash to pay for almost everything, from breakfast to a gas bill." he said.

QR code is everywhere

Walk into the farmers market near the Workers' Stadium in central Beijing, and you will find that QR codes signs have replaced cash baskets in front of the stalls. Gone are the days when people search through their pockets for a coin; customers are now paying for their fruits and vegetables just by scanning these codes using their phones.

Liu Zhongliang, a 38-year-old fruit vendor, tells his customers that they can scan the QR code to pay for his bananas.

"I always used to take a large amount of change, but now WeChat saves me time going to the bank and helps me to avoid counterfeit bills,"he said.

When asked about China's moving toward becoming a cashless society, Liu said, "I totally support that. Moving toward a cashless society is an inevitable trend."

But China's cashless society may be different from the Western countries where payments are often made with credit cards. Cashless payment in China mostly refers to digital transactions using mobile apps such as Alipay and WeChat, which are run by China's tech giants.

In Beijing, everyday shopping is just one example of China's new cashless lifestyle. Liu Yue, in her 20s, can hardly recall when she last paid in cash. "I do not need cash in a market, for paying electricity and water bills, or for buying tickets. I can ride the ofo or mobike (shared bike) to my company, order food on (online food delivery service), and even exercise in the automated fitness center by scanning a QR code with my phone. I believe I can survive in Beijing for a whole week without any cash in my pocket."

Vying for the lead

As he receives customers at the register, 7-Eleven clerk Zhang said instead of asking them "cash or card," he now asks "Alipay or WeChat."

Alipay and WeChat, the two most popular mobile payments services in China, are vying to lead China's transition into a cashless society. On July 31, Alipay announced that the first week of August will be the "Cashless Week." Meanwhile, WeChat named August 8 as the "Cashless Day." During these promotional periods, the two services are offering rebates for customers who shop and make payments using their mobile apps.

According to the data released by the People's Bank of China, a total of 157.55 trillion yuan (US$23.42 trillion) of mobile payments were made in 2016, up by 45.49 percent over the previous year. The increased mobile payment is moving China into the cashless society at a fast pace.

Security concerns

Not everyone is entirely at ease with China rapidly becoming a cashless society. As mobile payment penetration has reached 64.7 percent in 2016, according to Bank of China, security is becoming one of the top concerns for skeptics of the trend.

"I'm a little worried about the security of mobile payments," said 16-year-old Cao selling lotus seeds on a pedestrian overpass in Chaoyang District. Although there is a QR code in front of her stall, she prefers to take cash. "It seems to me that a cashless society would not be quite safe, since there may be hackers who can steal my money stored on an Alipay account."

Also stored by any online payment service is its consumers' private information, including name, phone number and ID number. Preventing identity theft could also be a challenge for the impending cashless society in China.