China's central bank tackles cashless overhype

July 16, 2018 Share Source

In a bid to stop people from discriminating against cash, The People's Bank of China announced on Friday that all businesses and individuals must resume accepting cash by the mid August 2018.

The central bank has given merchants a one-month adjustment period before regulating authorities begin investigating cashless businesses that are not e-commerce or unstaffed. In the statement, the bank also points out that businesses and individuals should not hype up the "cashless" idea when promoting non-cash payment.

Last year, two cashless campaigns boosted the number of China's mobile transactions hitting a record US$12.8 trillion.  

Excerpt from Forbes article (July 18, 2017)

In early August, the top two players in the field, Ant Financial (which owns Alipay) and Tencent (owner of Tenpay), promoted the idea of cashless society and distributed large rewards to customers and shops using their platforms. During the marketing campaigns, some merchants rejected cash as payment, arousing complaints from customers.

The central bank soon deemed the refusal of RMB illegal. Amid the controversy, Ant Financial and Tencent quietly removed the word “cashless” from their promotion materials. 

Read full Forbes article here

Now, the central bank is taking a stand against what it calls the cashless "overhype", maintaining that cash is still alive and well.

Afterall, China may have given the world cashless mobile payments, but it also gave the world paper money. 

Excerpt from South China Morning Post article (July 13 2018)

...Payments via mobile-phone apps such as WeChat Pay and Alipay accounted for more than 80 per cent of the country’s mobile payment segment. China is often seen as the first nation to move towards a completely cashless society.

“Cash has been rejected for some consumers in tourist attractions, restaurants, retailers and other industries. This damages the legal status of the yuan, and hurts consumers’ rights to choosing payment methods,”
" Website notice People's Bank of China As quoted by SCMP (July 13, 2018)

The PBOC said cash should be accepted alongside the debit card at all business outlets, with the exception of e-commerce and unstaffed stores. Businesses have one month from Friday to make necessary adjustments to avoid being investigated for breaches by the authorities.

In 2015, Alibaba Group purchased South China Morning Post, Hong Kong’s biggest English-language newspaper. 

Read full SCMP article here

Screenshot from @PDChina Twitter post

For how long has cash been around?

Last Updated: July 16, 2018