China wants to inspire cashless choices in rural areas, but critics warn not to give up cash
Last year, China's government fought back against businesses refusing cash by announcing a new law that fines businesses caught discriminating against cash. Now, the very country that invented paper money is looking to inform the rural 40% of the population of the benefits of non-cash payments.
Excerpts from The Straits Times Singapore
As part of their plans for rural digital integration, the authorities want officials in the countryside to expand internet availability, make more public services digital, and facilitate the sale of rural produce to consumers in the cities.
The Chinese have, to an extent, leapfrogged the credit and debit card revolution that overtook advanced economies in the last century, with most of new adopters using mobile technology to go cashless.
Although the cashless revolution in China and elsewhere appears unstoppable, there are still disagreements over the pros and cons of ditching old-fashioned notes and coins.
A regular gripe is that it tends to marginalise older and less tech-savvy spenders and the less well-off, who do not qualify as readily for credit.
"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 choose payment methods."
Logically, it would eradicate the theft of cash, and counterfeiting.
However, as many consumers have learned to their cost, the consequences of going digital are not entirely risk-free.
Bank robbers have been replaced by online fraudsters, who appear to have adapted to the decline of cash at least as skilfully as those who led the cashless revolution.
Others fear that the digital and mobile economy will also damage the privacy of consumers, whose data can be used by outsiders, including private data miners and suppliers, to track their spending.
Consumers who fear their governments might use digital payments to track their activities, or even tap their money, are generally told that they have nothing to fear if they have nothing to hide.