China’s central bank forces retailers to accept cash payments

January 2019
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According to Shanghai’s branch of People’s Bank of China, Hema stores have started to accept cash after a long run of exclusive electronic payments.

This has reportedly been a mass phenomenon in China, considering that, since July 2018, China’s central bank has dealt with 602 cases involving merchants rejecting cash payments, including Alibaba’s Hema Supermarket.

The retail chain allowed customers to scan the products with their phones in order to have access to more information about it and pay via the Hema app. Considering statistics indicating that some 89% of China’s population use Alipay and WeChat Pay for offline shopping, the country’s large-scale adoption of mobile payments has brought convenience to millions of people, including fish vendors and homeless people. With more than 1 billion monthly active users, the WeChat’s Tencent app allows users to chat, pay bills, make purchases, play games, and access government services without ever leaving the app.

Nevertheless, concerns started to emerge, considering estimations of more than 30% of people born in the 1950s having difficulties while trying to pay in cash.

The People’s Bank of China has thus justified it’s directive by stating that the practice of only allowing digital payments damages consumer rights and the renminbi’s legal status. The bank also issued a warning against “overhyping” the concept of a cashless society. In November 2018, the Chinese central bank announced that merchants who reject cash will receive bad credit scores.