Im­prove fi­nan­cial sys­tem to let cash go

China Daily (Hong Kong) - - COMMENT - 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 third­party 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.

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