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In China, Stores, Taxis, and Street Vendors No Longer Accept Cash; Digital Payments with QR Code Have Become the Absolute Standard
Those arriving in China and trying to pay a bill with banknotes or coins may face difficulties. Cash has virtually disappeared from the streets and businesses of the country.
The dominance of Alipay and WeChat Pay is overwhelming. Their blue and green logos are everywhere: markets, taxis, coffee shops, transport stations.
This change is not recent. For years, the Chinese population has adopted these digital means as standard. While other countries still discuss the end of physical cash, in China the decision has already been made in practice.
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Commerce No Longer Accepts Cash
In most Chinese establishments, paying with cash has become the exception. Many places no longer even have cash registers.
The newspaper Le Monde reported that some businesses refuse to accept banknotes. Others, when they do accept them, face a simple problem: they don’t have change to give to customers. Taxis also follow this pattern. And those who still accept cash do so reluctantly.
An example comes from Ma Dian, a fruit and vegetable seller in Hubei province. He said he only accepts cash for one reason: to help the elderly.
According to him, below the age of 80, practically everyone already uses Alipay or WeChat Pay. Above that age, adaptation is more difficult.
The elderly are the most affected and often rely on family members to make digital payments.
QR Codes Everywhere
QR codes are the new language of consumption in China. They are found at every counter, every street cart, every taxi meter.
There are two main types: static ones, on paper or signs, and dynamic ones, that appear on digital screens.
In the first case, the customer needs to enter the amount before confirming. In the second, the amount appears automatically.
In both cases, the final authentication can be done with a password, facial recognition, or a fingerprint.
Today, the two leading apps already allow, in some cases, the use of unified QR codes. That is, the same code can work for both Alipay and WeChat Pay. The choice of which app to use is left to the consumer.
Banks in the Background
This model has even changed the role of banks in the daily lives of the population. It is true that it is still necessary to have a bank account to link to the apps.
But in practice, banking services have become secondary. According to John Engen from American Banker, Chinese banks have been “reduced to passive actors.”
Users do almost everything with Alipay and WeChat Pay, from paying for purchases to transfers and donations.
Nevertheless, the Chinese government maintains control over this scenario. A landmark of this surveillance was the case of Ant Group, Alibaba’s financial arm.
In 2020, when the company was preparing to go public, its founder Jack Ma publicly criticized the government.
The response was swift: the IPO was canceled, and Ma spent years away from public life.
Government Bets on Digital Yuan
To not be left behind in innovations, China’s central bank has been working on its own digital currency: the digital yuan.
Unlike cryptocurrencies, it is controlled by the government. The goal is not only to provide an alternative to Alipay or WeChat Pay but also to create a parallel system to the dollar.
The project has been in testing for years, but its adoption is still limited. For now, the two major apps remain in control of daily payments.
Tourists Also Use the Apps
In recent years, both Alipay and WeChat Pay have started to serve foreigners. For about the past two years, tourists have been able to create accounts on these apps using credit cards.
Recently, transaction limits have been increased. On Alipay, for example, the ceiling has risen from $1,000 to $5,000, which corresponds to about R$ 27,000.
WeChat Pay even offers a digital wallet option without the need for a card. With it, smaller amounts can be loaded and used for simple payments.
The only requirement is to be connected to the internet. For this, it is recommended to obtain a local SIM or eSIM card, as some services require a Chinese number to send validation SMS messages.
The advancement of the digital yuan is still limited, but the dominance of Alipay and WeChat Pay shows how China is already practically living in a cashless society.
With information from Xataka.
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