Cash is king? Not in China

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Straits Times China correspondent Lim Yan Liang spends a day running errands and buying food using only his mobile phone.

A common refrain when I meet fellow Singaporeans in Beijing, such as during recent National Day get-togethers, is how we will manage when we eventually return to Singapore and have to deal with paper money again.

A civil-servant friend recounted how she instinctively reached for her phone to settle her taxi fare on a trip home.

Another shuddered when he thought about having to deal with coins and wet notes of unknown provenance, after having got so used to shopping with his phone at a Sanlitun fresh market.

As for me, the biggest change after moving to Beijing early this year for work is that my wallet has become largely redundant.

Since I opened a local bank account - the key step to going cashless in China - and activated my own Wechat Pay and Alipay accounts, I have been paying for just about everything from meals to groceries to high-speed rail tickets with my phone.

Even shopping online, whether on Taobao or ordering waimai (delivery), the default payment options are these two platforms, and not cash or card.

Indeed, my starkest memory from my first week in China was how much I stood out in queues, fishing for cash and waiting as cashiers who have become unaccustomed to dealing with paper currency did mental maths to work out my change, while those before and after me breezed by with a scan and a beep of QR codes on their mobile phones.

More than once, a vendor would point to his prominently displayed QR codes on seeing me with yuan in hand, and seem almost grudging in accepting my hard currency.

It later dawned on me that no stallholder would want to go back to handling cash, finding the exact change, and dealing with the entire banking and bookkeeping process when all of this can be handled so smoothly, hands-free.

China has now reached a stage where the government has to remind merchants and payment providers that cash is still a valid payment option.

The People's Bank of China (PBOC), or central bank, last week told Alipay's parent company Ant Financial to rein in its "cashless weeks" promotion that encourages merchants to exclusively accept Alipay in exchange for incentives. Such merchants went so far as to refuse cash payments, prompting PBOC to ask Alipay to delete the word "cashless" from its campaign advertisements.

But while the reaction to this news was mostly amusement, it shows how far China has come in becoming a cashless society.

So I totally got Prime Minister Lee Hsien Loong's National Day Rally speech on Sunday, about how Chinese tourists would consider Singapore backward for still doing things the old way.

A common misconception of my friends back home is that payment security is a concern. But Wechat Pay and Alipay can be secured by either a password or fingerprint, which means a stranger with your phone must still have your code - or fingerprint - in order to start buying things with impunity.

Going cashless has other perks. Going Dutch is as easy as opening a split-bill in Wechat, with options for splitting by exact amounts (great for when someone tucks into a three-course meal while another opts for a salad) or splitting evenly.

As for my wallet, now relegated to holding my identity and metro cards and a bit of emergency cash, it no longer inhabits my back pocket but a corner of my work bag. I still carry it every day out of habit, and only because the leather billfold is a birthday gift from my fiancee, but that might soon change.

The Beijing metro was one of the last hold-outs to cashless payments, demanding that passengers use a stored value card to ride. But since June, it has been trialling contactless smartphone payment, and I think I will jump on board soon.

Sorry my love, but cashless beats cash any day.

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A version of this article appeared in the print edition of The Straits Times on August 22, 2017, with the headline Cash is king? Not in China. Subscribe