China’s Cashless Course Challenges New Arrivals

China’s strong reliance on digital payments risks excluding many, with foreigners—including tourists and new arrivals—top of the list.

Writing for the South China Morning Post, journalism student and intern Judy Cui reports that cash is still the preferred payment method for overseas travellers, but they experience barriers to using it. Those wishing to pay digitally are also being hampered by restrictions placed on international cards.

Derek Cheung, an investor from Singapore, reports having difficulty making everyday payment during a late 2023 trip to multiple cities across China. Major mobile payment service WeChat Pay, for example, restricted the payments he could make due to the non-Chinese card he had linked, meaning local friends often had to pay for him. While he was able to use cash with street vendors, he says many of them also prefer mobile payments, rarely accepting international cards and not always offering change for cash transactions. He concludes: ‘China’s payment methods cater largely to locals.’

However, this also may not be true, as Cui cites Central Bank data showing more than 75 percent of China’s elderly population are heavy cash users, with that percentage rising to over 80 percent in rural areas. In addition to cashless payments shutting these individuals out of the economy, there are also concerns around resilience. Flooding across central China in 2021 plunged millions into ‘a digital dark age’ and prompted the addition of cash to a list of survival necessities prepared in response. Banknotes and coins become the only way to transact when power or internet go down, whether due to a short-term local or provider issue, or something more widespread and serious that can stretch into days and weeks.

The drive towards a cashless economy also disadvantages anyone seeking to make private payments, since every digital payment is approved and tracked by third parties, opening opportunities for interference, such as limiting where and how money can be spent, or even cutting certain people off entirely from the economy.

While Cui reports the People’s Bank of China recently ‘pledged to optimise payment methods for overseas tourists by providing more convenient mobile payment services and expanding the acceptance of international credit cards’, the loss of cash infrastructure and the risks it embodies for nationals, new arrivals and tourists alike is not so easily remedied, with the number of ATMs nationwide dropping below 900,000 in 2022.

Cash is inclusive and private. It still plays an important cultural role for Chinese people, lying at the heart of Lunar New Year celebrations, and its resilience has been recognised as an important element of disaster response. As in nations worldwide, the challenge of preserving the benefits of cash rests with everyone living in and travelling to China: use it or lose it.