It is reported that according to some analysts, China, the first country that used paper banknote in the history, now with the surge in mobile payments, may become the first country that stops using cash. While two years ago, it was Denmark that was predicted to be the cashless country.
So, will China be “the first cashless country”?
When credit card just emerged, some senior citizens applied for it but soon, the credit card was thrown in the closet. Because they thought “swiping card to pay couldn’t give them a same feeling as spending cash”.
For the Chinese who went through frugal time, consumption was a solemn ritual: asking for price, bargaining, paying cash, and then giving seller notes one by one. A set of cumbersome processes and the thickness of the pocket sugges that consumption was a solemn and scarce event.
Later, the emergence of credit cards partly eliminated such sense of ritual, but the Chinese people still retained past habits. They set a complex password and only in a few occasions do they take out the credit card.
Chinese people had a faith in physical currency – only money in pocket is secure and seeing is believing. Even when showing off wealth, coal bosses in Shanxi province are famous for flaunting cash.
However, China actually now becomes a model of mobile payment. Data shows that in 2016, China’s mobile payment reached 5.5 trillion US dollars. Today, some foreign media reports China’s two-dimensional code culture like this: China’s cashless revolution is influencing the world.
Compared with the credit card, QR code consumption has no ritual sense at all. Buyer and seller use two-dimensional code without the change of goods and cash. The only variation is the number of the online accounts.
Media and Internet giants praise cashless era while ordinary people also give their vote for mobile payment because of the convenience. But no cash age is still a utopian term. In credit card era, Americans used cards to partly replace cash. While today, mobile payment just has a wider applications than the credit card. To the end, nothing is likely to eliminate cash.
However, what mentioned above does not obstruct the fact that cashless era has been declared as consensus. Mobile payment and cashless era has fundamentally changed the Chinese people consumption habit, which is cautious and conservative. Scanning QR code makes consumption have less feeling of spending money. Technological change decreases Chinese people’s need of ritual in transaction and consumption as they did in the past: it is hard to have consumers pay 100 yuan cash, but quite easier to pay on mobile.
The credit loan which wasn’t realized by credit card is now becoming a reality by mobile payment through binding a credit card or loaning from Payment Company. Soon, Chinese who once only spent money they earned will be brought into the future of credit consumption. This is undoubtedly a major positive for business.
From another perspective, money trading in fact is a process of data exchange. In the era of cash, the data is handled between people in the transaction. Consumers could decide their payment according to the thickness of cashes in their pocket. And businessmen could determine their sales performance about whether they get profit or loss based on their cash box. In addition to the bank, there is no third party between consumers and businessmen.
But the mobile payment allows data to flow among more subjects. In a transaction, the mobile payment needs to be more aware of transaction data than the buyers and sellers: the level of consumer income, the amount of business transactions and so on. And we all understand that what is most precious in future society is the big data.
Thus, what behind the concept of cash-free era is a comprehensive challenge to China’s financial system, public consumption and large data ethics. Cashless society will never appear, but a new era has come.
This article by Hu Han originally appeared in Beijing News and was translated by Pandaily.
Click here to read the original Chinese article.