The plan, for rural areas of China to go cashless, appears as in a series of guidelines put together by China’s top financial regulators: China’s central bank, the Banking and Insurance Regulatory Commission, the Securities Regulatory Commission, the Ministry of Finance and the Ministry of Agriculture and Rural Affairs. The intention is to ensure that online financial services become more accessible to rural residents.
Behind this is the intention to make life easier for those in rural communities to obtain key supplies and a reflection of the decreasing value of paper coins and money, according to TechCrunch. The thesis runs that by digitizing the transactions of farming communities, including activities like obtaining loans to purchase fertilizers and for leasing land, those in rural the economy will see a change in fortune. One social problem in China is a desire by many in rural communities to work in cities, attracted by the promise of well-paid jobs. In recent years the proportion of the population living in rural areas has slipped to 42 percent.
In terms of the digital transactions process, services like scan-to-pay are already the norm in bigger cities in China, and across the population a whole 77 percent of China’s adults used digital payments in 2017. The task now is with setting up systems to enable this to apply to rural areas, which will present opportunities for companies operating in the private sector.
Globally there are still advocates for cash, and there remains a wide variety of consumers who want to avoid the bank or credit card interaction and use electronic cash. Recently Digital Journal interviewed Danny Shader of the company PayNearMe, where the case for the longevity of cash is outlined. See: “Why cash still matters in the digital age“.