Is China ready to go cashless?

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Scan a QR code and press "ok" to confirm payment. This entire transaction is done in just a minute. No need to fumble with coins and notes. Can China embrace a cashless society?

Guiyang signed a contract with Ant Financial on July 1 to became the fifth cashless city, following Wuhan, Tianjin, Hangzhou and Fuzhou. Alipay also announced it will turn Guiyang into the first cashless city in southwest China.

Mobile payment platforms WeChat Pay and Alipay, operated by Ant Financial, is dominating the market and now helping China to go cashless.

Online payment is on street in China. /VCG Photo‍

Research showed Chinese mobile payments were nearly 50 times greater than those in the US in 2016. Chinese consumers made transactions amounting 3 trillion dollars in total last year via Alipay and WeChat Pay. The fast growing system of online payments rooted in Financial Tech, also known for FinTech, is becoming one of the fastest growing industries globally.

The form of money has always changed with time. Like shells, metal ingots and paper money, the trend of cashless currency will be unstoppable. FinTech is booming and it is growing at a speed faster than it ever was before.

Despite its conveniences, practical conditions still need to be discussed.

Regional economic development across China is still very uneven. Highly developed cities such as Beijing, Shanghai and Hangzhou cannot be considered as a universal case for smaller cities.

Fast growing third-party payment is rapidly changing the consumption habits of Chinese people. /VCG Photo

There are also inter-generational differences in mindset when it comes to mobile payment. Most of the elderly believe in the old saying of "it's safer to keep money in your hand than in the bank." And the value of savings will restrict the development of mobile payments.

Also, the irony of that statement is that a cashless society can eliminate the risks of counterfeit paper currency and petty crime.

However, the cashless system is not without its risks. High-tech crimes, identity theft and online fraud are among the problems that e-payment platforms face.

Currently, China's mobile payment is mostly concentrated in the fields of business, and are highly popular in cities which are highly economized. Online payment in public affairs and social security sectors is impeded by low acceptance.