China orders more than 600 merchants to stop rejecting cash

Alibaba’s Hema supermarket and others reprimanded for only accepting mobile payments

Mobile payments

Xinmei Shen

Published: 6:02pm, 6 Dec 2018

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This article originally appeared on ABACUS

Mobile payments are so popular in China that some shops have taken to only accepting electronic money. Now they’ve been told to stop.

Since July, China’s central bank has dealt with 602 cases involving merchants rejecting cash payments, including Alibaba’s Hema supermarket. The “new retail” chain lets shoppers scan goods with their smartphones to see more information, as well as paying with the Hema app.

Alibaba boasts a more efficient and “seamless blend of online and offline shopping experience”, but consumers complained to the central bank’s Shanghai branch that they were told they couldn’t pay with cash at all.

(Abacus is s unit of the South China Morning Post, which is owned by Alibaba.)

Following the central bank’s order, the Hema stores in question have reportedly started accepting cash again. We reached out to Alibaba for more details, but didn’t receive an immediate response.

WeChat and Alipay jointly hold over 80% of China’s mobile payment market. (Picture: SCMP)

China’s fast and large-scale adoption of mobile payments has brought convenience to millions of people -- from fish vendors to beggars. Some 89% of Chinese people reportedly use Alipay and WeChat Pay when shopping offline.

But it’s also been a pain for people less accustomed to new technology. In September, a 67-year-old man was involved in a quarrel in the northern province of Heilongjiang, after a shop refused to take his cash to pay for grapes.

“I was using real renminbi, not fake bills. Are they humiliating me for not knowing how to use WeChat?”, the man yelled furiously in a video that was widely circulated online.

WeChat, the app that does everything

He is not alone. It’s estimated that more than 30% of people born in the 1950s have run into problems trying to pay in cash.

In July, China’s central bank started cracking down on merchants who have refused to accept fiat money, saying that it damages consumer rights and the renminbi’s legal status. It also warned against “overhyping” the concept of a cashless society. Last month, it said that merchants who are found to have rejected cash will receive bad credit scores.

You can now use Apple Pay on the subway in Shanghai and Beijing

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