Improve financial system to let cash go

A man uses his smartphone to scan an Alipay two-dimensional code for payments at the first unmanned supermarket in Hangzhou, Zhejiang province. [Photo/Asianewsphoto]

THIRD-PARTY MOBILE PAYMENT OPERATORS Alipay and WeChat Pay, launched "cashfree" campaigns nationwide on Tuesday, generously subsidizing users who refrain from using cash this week. Southern Metropolis Daily commented on Thursday:

For the two mobile payment giants, the pursuit of a "cashless" society is not just a vision of a digital lifestyle, but also a commercial pursuit.

Originally designed to facilitate e-commerce transactions, third-party mobile payment platforms such as Ailibaba's Alipay and Tencent's WeChat Pay have already proved extremely popular thanks to their convenience, and they will undoubtedly achieve greater success at home and abroad.

Yet whether they are the last piece of the puzzle for establishing a cash-free society is still unclear. A cash-free society is not something everyone desires, not least when there is plenty of space for improvement in China's traditional banking system.

Has the adoption of digital payments saved people the trouble of having debit and credit cards? Not really. Mobile payments depend on working smartphones or other mobile devices and third-party apps, while card payments can be made without any third-party assistance.

The lack of quality financial services in China has a lot to do with the rise of mobile payments. An advanced financial system is the key to the pursuit of cashless society, regardless of payment methods.

In the United States, card payments are still preferred not because the bricks-and-mortar retailers refuse to accept mobile payments, which accounted for just 0.2 percent of the retail sales in 2015, but because of that country's sophisticated financial system.

Scandinavian countries particularly Denmark and Norway have managed to proceed further in building cash-free society, because they are home to small populations as well as established welfare and credit systems, something not available in other Western nations like the US. The same applies to China, where the construction of a mature financial system is still underway.