Physical currency still has a place in an increasingly digital world according to China's central bank which warned that rejecting cash as a form of payment is illegal.
The country's central bank fears that rejecting cash in favour of digital payments could eventually lead to a loss of confidence in physical money while further alienating those unfamiliar with electronic payments.
In China, electronic payments from e-commerce giant Alibaba Group's Alipay or Tencent Holding's WeChat have become quite popular with consumers who use them to pay for public transportation and at both large and small retailers.
The fact that electronic payments are easy to use for both customers and retailers have led some vendors in Beijing and Shanghai to stop accepting physical cash.
Loss of confidence in cash
In a post on its official WeChat account, the People's Bank of China stressed the fact that electronic payments must not entirely replace physical currency, saying:
“Electronic payments has given us a new way to pay, but it must not replace cash payments. Over time, the practice can become second nature and people could lose confidence in cash.”
The bank also pointed out that electronic payments are unfair tot he elderly and those who live in underdeveloped parts of the country since mastering the processes required to make electronic payments could prove difficult.
China's central bank also criticised how local authorities have used taglines such as “cashless city” to promote their city's technology advancements.
Via Reuters (opens in new tab)
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