Cash has largely disappeared in China; mobile payments via Alipay and WeChat Pay dominate every aspect of daily life. These apps are used everywhere, from supermarkets and cafes to taxis and public transport. While Europe is still debating the future of cash and digital currencies like the digital euro, China has already embraced a cashless society.
For the vast majority of the population under 80, mobile payments have become the norm, and most businesses have abandoned traditional cash register systems. However, older generations are struggling to adapt to this transformation and often rely on family members for payment assistance. QR codes are everywhere;
Users make payments by scanning static or dynamic QR codes, and these transactions are verified with a password, facial recognition, or fingerprint. The dominance of Alipay and WeChat Pay has relegated traditional banks to the background. Although a bank account is still required to use these applications, the role of Chinese banks has significantly decreased because almost all financial transactions take place through mobile applications. This situation was highlighted in 2020 when the Chinese government halted the initial public offering (IPO) of Alibaba’s financial arm, Ant Group. This development occurred after founder Jack Ma criticized state policies. China is also continuing its efforts to develop a digital yuan, aiming to offer a state-controlled alternative. However, currently, Alipay and WeChat Pay are by far the leading payment systems in the country.Tourists who previously had difficulty using these applications can now link their international credit cards to Alipay and WeChat Pay, making payments easier. However, for smoother payment transactions, visitors are advised to use a Chinese mobile number for SMS verification.
China’s transition to a cashless economy offers a concrete example of a future where digital payments become the norm. Whether other countries will follow China’s lead is yet to be seen, but this transformation has already begun in one of the world’s largest economies.
