China to 600 Retailers: We Are Not A Mobile Payments-Only Society
It’s kind of odd how often this has happened, but it seems that any time a government has pushed for a cashless society, it’s drawn back at the brink. The Indian government demonetized most—but not all—of its currency. Sweden’s push to go cashless prompted regrets of its own. And now China, where mobile payment were on track to become king, recently got personally involved, as the government ordered over 600 merchants that they must accept cash.
That wasn’t all at once, of course, but the reports say that, since July, China’s central bank has issued instructions to 602 different retailers to stop rejecting cash from customers. This includes the Hema supermarket chain owned by Alibaba, who in turn runs Alipay, one of the biggest mobile payments systems in China at last report. Reports further note that, following the central bank’s instructions, Hema stores started taking cash again.
While mobile payments have definitely caught on in China—even beggars have quick response (QR) codes that allow donors to hand over cash via mobile payments mechanism—not everyone has caught on so quickly. One video that went into wide circulation online featured a 67 year old man who railed against a shop who refused his cash. Current estimates say that more than 30 percent of people born in the 1950s struggle with trying to pay in cash at places that won’t take it.
The central bank, meanwhile, hastened to remind merchants that renminbi is indeed legal tender in China and it had better be treated as such. The central bank put teeth to its reminder by noting that merchants who reject cash will take direct hits to their credit scores.
It’s unclear if that means their actual credit scores or the new “social” credit score that’s been going in place, because I can’t imagine how refusing to accept a certain kind of payment system could be a reflection on your ability to repay debt. But then, this might be just the only real stick the central bank has to levy against somebody selling dim sum in downtown Beijing who won’t take cash.
Regardless, it’s a reminder to us all; cash is still an option. In many places, it’s still king, but it’s a great thing to have options.