11 ms·

China Can’t Afford a Cashless Society

140 points by methou 8y ago

fouc 8y ago
I wonder if paying with cash is an issue in other countries also? It might be possible to solve the issue of cashlessness by making it even easier for the poor to use it, perhaps by providing super cheap cards that somehow let people still make/receive payments without phones?
- chvid 8y ago
  There is a somewhat parallel discussion in Scandinavia on going cashless. Exactly the same issues: Poor people being marginalized, old people unable to use new technologies. And the uniquely Scandinavian; how to do "black work", work that is not reported to the tax authorities, without cash.
  - lotsofpulp 8y ago
    Black work (and black money) is most definitely not uniquely Scandinavian.
    - TheCycoONE 8y ago
      It might be uniquely Scandinavian if that was seen by government as a concern rather than an advantage. It isn't clear if this is what the gp is saying though.
      - lotsofpulp 8y ago
        I know the governments in India/China/US don’t like black money. After a certain point, an organization gets so big that it’s more profitable for those at the top to make sure everything is accounted for rather than letting all the little minions take their cut. It would be beneficial for all of society if everything was accounted for, but only if everything was completely transparent, so that everyone can see what everyone is doing to hold each other accountable. Right now, we’re heading towards the worst system. The ones with the guns and bombs (power) get to see what all the masses are doing, but the masses don’t get to see what they are doing.
        dis-sys 8y ago
        > I know the governments in India/China/US don’t like black money. for 99% Chinese, as of writing, the Chinese government doesn't care what they are doing when it comes to personal tax. the fundamental difference here is that 90% of the tax collected by the Chinese governments are from companies, personal tax including those doing family business only counts for a very small %. that is the exact reason why small business vendors all started accepting mobile payment - they know full well that there is no tax risk for doing that. things only become different when you are the big fish in the pond - if you only have a few million $ worth of black money, the safest place to keep it is your local branch of the biggest state owned bank.
        Loughla 8y ago
        That just seems so arbitrary and dangerous. SO there is no risk right now. But what happens if I make the wrong person mad? Now there's a trail of cash that I haven't paid tax on, and they've got me. It just seems like a way to bake possible governmental control into an uncontrollable system like black money.
        dis-sys 8y ago
        > But what happens if I make the wrong person mad? Now there's a trail of cash that I haven't paid tax on, and they've got me. always pay your tax OR be nice. both are actually easy!
        Loughla 8y ago
        >that is the exact reason why small business vendors all started accepting mobile payment - they know full well that there is no tax risk for doing that. Your statement. I understand that to avoid getting caught for breaking the law, don't break the law. But this conversation was in the context of black markets and their 'no risk' existence at the good graces of the Chinese government. What you call 'no risk' is actually just hard-coded blackmail from the government, I believe.
  - sharpneli 8y ago
    From Finnish perspective: Banks are mandated to provide basic accounts and Visa Electron equivalent cards to anyone applying. This is because social support and pensions are paid to bank accounts instead of as cash.
    - hocuspocus 8y ago
      It's a EU directive: https://europa.eu/youreurope/citizens/consumers/financial-products-and-services/bank-accounts-eu/index_en.htm https://europa.eu/youreurope/citizens/consumers/financial-pr...
    - gowld 8y ago
      In USA debit cards are a common way to receive benefits, but there's no bank account attached. A bank account wouldn't add much though, except perhaps a persistent long-lived account number which might be useful.
    - clubm8 8y ago
      That law sounds good, but does Finland have the same issue as the US with regard to fraud protection? In case you're not familiar, US debit cards are tied to a bank account, but weirdly can be used without a PIN if they are run as a credit card anywhere that takes MC/Visa/whatever-the-issuer-is. However, the charge is deducted immediately from your account as would a debit charge. This means if there's fraud, even if you are refunded eventually you will be without access to money for some period of time. The easy fix is to withdraw some cash for day to day stuff from a trusted bank ATM rather than constantly swipe your card. Even if the government provides you a no frills bank account, the fraud risk would make many prefer to use their card as little as possible in the USA.
      - kalleboo 8y ago
        VISA Electron (and I believe Maestro, the MasterCard equivalent) cards only support "online" transactions, so they're able to reject transactions without a PIN, without enough money in the account, etc. They don't even have embossed numbers so you can't run them in one of those old carbon copy machines. This is why they are issued to people who are underage or a credit risk since they can't run an offline transaction without coverage in the account.
- superkuh 8y ago
  I recently attempted to buy dinner at my brother's wedding (in the middle of the USA) from a food truck. I was unable to because they only accepted transactions from corporate people on behalf of actual people (credit cards). They would not accept any form of payment (or even let you order) if you were just an actual human. Not accepting cash is a form of economic racism. And it's slowly creating sunset towns where normal people trying to transact with other people aren't allowed. You have to have a corporation vouch for you.
  - seanmcdirmid 8y ago
    On the other hand, you can almost get by in the USA without any cash at all. Ever since I’ve returned from China to the stares, I’ve been to an ATM twice.
- kalleboo 8y ago
  I went to Sweden this summer and there were quite a few shops (including restaurants in the airport) that were "Card or Swish only", and one bar I went to was Swish-only. Swish is a local mobile payment system tied to Swedish bank accounts.
ForHackernews 8y ago
It seems like the Chinese government would be happy to subsidize cashless payments for the surveillance potential alone.
- weliketocode 8y ago
  Would the population greatly reduce spending on large swathes of items for exactly this reason?
  - venatiodecorus 8y ago
    that would be quite terrifying if it were to occur.
EZ-E 8y ago
> When apps are built on the assumption that residents of a specific community are formally enrolled in a bank or financial institution, the unenrolled are simply locked out of being able to pay Ironically I recently realized tourists visiting China might be victim of this too. If you're coming to China you won't be able to do much until you open a bank account and get a local phone number. More and more restaurants or stores only accept mobile payment using wechat/alipay but short term visitors won't be able to open a bank account (even if you try these days, many banks will refuse you if you have a tourist visa). Visitors also won't be able to get a subway card on their phones, can't rent shared bikes, and won't be able to order a taxi using the local "uber" because all of these require a local bank account too. Even my local coffee shop only accept payment through their app with gives you a QR code to get your coffee, no cash. Even more ironic, if you do go through the trouble, open a Chinese bank account and use the local payement apps (WeChat/Alipay), you won't be able to use it back in your country - even if the stores in the airport accept Alipay for example, only users with a Chinese ID can use it outside of China.
- techsupporter 8y ago
  This is why you’re starting to see services like Swapsy and Megachange. They take USD via PayPal and “convert” or “match” it to RMB in WeChat and Alipay. I think you’re right though: this is going to be a concern for tourists to China. Maybe that won’t be a concern for the locals or maybe the cashless services will figure out some way to take foreign cash for electronic credits, like these exchange services are doing.
  - brianwawok 8y ago
    How big is Tourism in China? Quick google tells me 2%? https://www.statista.com/topics/1210/tourism-industry-in-china/ https://www.statista.com/topics/1210/tourism-industry-in-chi... China isn't a tropical island country with 75% of income from Tourism. It may be an acceptable risk to inconvenience tourists to have the desired local monetary policy?
    - setr 8y ago
olalonde 8y ago
That just sounds like banks are worried about getting disrupted by mobile payments. Even beggars in Shenzhen accept Wechat payments these days so I am not buying the "think of the poor" angle. ATMs and banks lost a lot of their utility since the rise of mobile payments.
- 07d046 8y ago
  The article mentions this: > In many cities, cashlessness is so common that panhandlers and street musicians use WeChat and Alipay QR codes to ask for change. But these anecdotal cases obscure some of the class-related issues that cashlessness can’t fix, and may worsen. The 2017 World Bank Global Findex database, which measures financial inclusion, estimated that some 200 million Chinese rural citizens remain unbanked, or outside of the formal financial system. Cashless payment systems by design require formal enrollment in banks, which are then tied to the mobile payment platforms that WeChat and Alibaba host.
  - icebraining 8y ago
    Cashless payment systems by design require formal enrollment in banks I think this is the dubious claim. According to comments in this very thread and on other sites, you don't.
- TorKlingberg 8y ago
  As the article states, you need a Chinese bank account to use any of the new mobile payment methods.
  - jpatokal 8y ago
    It's a bit more complicated than that: you can link WeChat to some credit cards, or get money transferred to your account. However, it's difficult to impossible to do this outside China and/or without a Chinese mobile number. Here in Australia, WeChat/Alipay are starting to proliferate in Chinese shops & restaurants, but it's impossible to join either locally. No shop that I know of will reject cash, but "cash or WeChat/Alipay only" is fairly common.
raxxorrax 8y ago
create anonymous depots and I would gladly use cashless transfers more. Currently, I just don't see the benefit. I use both forms of payment. Wouldn't like missing one of them. But especially in China, where buying the wrong products might be bad for you social score, I would vastly prefer cash. I wouldn't want to get any data in the hands of insurance companies either. Cashless payment is easier? Depends on the scenario. I can just give anybody 20 bucks without any third party involved. You cannot beat that with any technical solution.
- usaar333 8y ago
  > I can just give anybody 20 bucks without any third party involved Well, sure, if the good costs $20. If it doesn't, hope they have change. Or you have change. And carrying around tons of change is definitely painful.
  - raxxorrax 8y ago
    Or I will let them keep the change because I am a generous person.
ElBarto 8y ago
Banks feel threatened because these payment platforms bypass them. In my view, there is a real concern that these platforms are becoming major financial institutions without being subject to financial/banking regulations. At some point the Chinese government will have to look into that.
TheBobinator 8y ago
The problem with a cashless society is, much like global warming, politicans have dug themselves a literal grave on the policy. It takes a really special kind of totalitarian a-hole to actually believe any tax, like a carbon tax, could save planet earth. Conceptually, on an academic level, that's right up there with blame the jews for our woes and lets gas them, or lets enslave the savages and breed them for fun and profit. We don't discuss new technology, or restricting reproduction\austerity measures, or hard science. And we certainly don't put money into a space program to, at the very least, give people hope for the future so they can accept some pain now because hey, thats hard. Nope, a Tax will save the world. As soon as you float that idea, People intrinsically know you are detached from reality and are the kind of dangerous where you'd kill 99% of the population to make a buck, and they take the logical steps of demonizing and ignoring you and defend their lives. Heaven forbid the research and consensus is completely true and accurate. Similarily, we have all kinds of social problems that are caused by what exactly? We don't really fully know, and heaven forbid we ask people, or request they participate in surveillance and research for communal profit and post the data publicly. It takes that same special kind of a-hole to think standing up a surveillance state so that they can continue to engage in the bias of believing in whatever they want to believe in and try to drag everyone else along with it is a good idea. That is what is really going on here. You are the product, and what do we do with products when we're done with them? When government and corporations become the consumers, it turns everyone and everything into literal trash. The chinese government has shown, repeatedly, their ignorance and arrogance on the world stage. I certainly hope the best to them in building an ideal society, and they have a lot of work to do learning their way through that one. I hope they come to find a better way and that I am wrong. But I'm not holding my breath.
thoraces 8y ago
Maybe Alipay/WeChat can use their vast amount of money and deep connections to Chinese manufacturing to make simple devices that literally only act as a wallet (hopefully simply enough such that even the elderly and technically/actually illiterate can use them), and then partner with banks (or become ones themselves) to provision bank accounts for people who they sell those devices to. If enough vendors stop accepting cash, then that alone ought to be reason enough for people in rural areas to make the effort to get/purchase these devices, assuming Wechat/Alipay makes the effort to distribute them. Though it seems that there is limited market value to doing such a potentially expensive and politically tricky maneuver. Classic scenario in a capitalist world—the market doesn't see profit in protecting a helpless class like the poor and elderly, so the market proceeds to ignore them and screw them over.
- vorg 8y ago
  This would be the banks moving into the cellphone market -- a good way for them to counter phone-based intrusion into their business model by WeChat/Alipay.
DINKDINK 8y ago
Related reading: "If plastic replaces cash, much that is good will be lost – Brett Scott | Aeon Essays" https://aeon.co/essays/if-plastic-replaces-cash-much-that-is-good-will-be-lost https://aeon.co/essays/if-plastic-replaces-cash-much-that-is...
- dis-sys 8y ago
  it is so funny that the author just jumped off an international flight with his complained jetlag, yet he choose to praise cash when he couldn't buy coke from a vending machine using his foreign credit card. he further mentions that "Cash transactions are peer-to-peer, requiring no intermediary, and are thus transactions that Visa cannot skim a cut off", I really want to know how to buy a can of coke in Netherlands using Chinese Yuan/USD/Japanese Yen in cash in such a "no intermediary" no "cut off" fashion.
  - DINKDINK 8y ago
    >I really want to know how to buy a can of coke in Netherlands using Chinese Yuan/USD/Japanese Yen in cash in such a "no intermediary" no "cut off" fashion. It's almost like we would need a digital, global, censorship resistant currency
    - mmt 8y ago
      One that actually works, with sufficient trust, still has "a middleman" (blockchain solutions implement this as many, distributed middlemen, IIUC, but that detail seems immaterial to an end user) and thereby still requires a "cut of" the transaction. What would be the transaction cost for a couple-euro-equivalent vending machine purchase, using Bitcoin today? What about the cheapest (per transaction) cryptocurrency out there?
      - DINKDINK 8y ago
        Bitcoin Layer 1 (on chain) ~= .09 euro Bitcoin Layer 2 (lightning network) ~= 0.0005 euro Source: https://twitter.com/alexbosworth/status/1029425619350642688 https://twitter.com/alexbosworth/status/1029425619350642688 These costs are independent of the bitcoin amount transfered. >blockchain solutions implement this as many, distributed middlemen, IIUC There are no "middlemen" required to transfer bitcoin via layer 2. "Middlemen" required to transfer bitcoin via layer 1 are miners and a peer (could be the miner) to relay a block to you.
larrysalibra 8y ago
I agree with the directional sentiment of the article that a cashless society is bad for the poor and for other disenfranchised members of society. I don't see the "many places will not accept cash" problem that the article suggests is widespread. I'm in Shenzhen once or twice a month and haven't had any problem paying with cash - taxi drivers and vendors don't complain. Vendors being unable to give change for 100 CNY bills was a frequent problem 10 years ago and is still periodically a problem. More often than not the solution is still the same as it was 10 years ago: insist that this is all you have. Half of the time the vendor really does have change and just didn't want to give it to you. The other half of the time the vendor really didn't have change and will ask a neighboring shop for change.
ArtWomb 8y ago
Rise and fall of China's largely unregulated P2P lending startups is another cautionary tale. Over 5000 companies existed at its peak a year or two ago. And many have collapsed leaving investors protesting in the streets. Scoring risk and determining borrowing rate at scale could see tremendous efficiencies once a lot of data is obtained. Square Capital, for example, simply uses a fixed rate around 10% against sales that is automatically deducted from daily tills. But for micro-transactions, I don't see why 4-5% can't be achievable. If the global rate of repayment skews much higher. https://technode.com/2018/08/02/the-rise-and-fall-of-chinas-online-p2p-lending/ https://technode.com/2018/08/02/the-rise-and-fall-of-chinas-...
- dis-sys 8y ago
  nothing about borrowing here, it is about paying out of your own pocket to pay for taxi or dinner. alipay is reporting losing 5 Yuan out of handling every 10 million Yuan of transactions. that is the risk level for the topic matter.
ppeetteerr 8y ago
The real crime here is the amount of tracking that happens on foreignpolicy.com . Holy-Surveillance, Batman! For realz tho', greater marginalization of the poor thanks to a move towards digital reminds me of the many services that require an active internet connection. I once had an internet provider ask that I look up their online FAQ if I had trouble installing my internet connection. (thanks local ISP!) It's like the saying goes: "it's expensive to be poor".
deleted 8y ago
[deleted]
dis-sys 8y ago
It is a poorly written article. The biggest risk is never about the social disadvantaged groups that could be marginalised by mobile payment, Alipay and Wechat have all business motivations and resources to get them sorted. Just look at how Didi paid both taxi users and drivers money to use its app a few years back. Don't have a mobile phone to use Alipay? Surely Alibaba can get you one with pre-loaded ads and Alipay - cheapest brand new 4G android phone on taobao.com is $30. Don't know how to use it? Surely they can get someone to teach you in person - average hourly wage is just $4! The real risk is the fact that Alipay and Wechat can now ban anyone from having a normal life in China - they can suspend your alipay and wechat accounts and you are totally screwed.
greatabel 8y ago
The real situation is: as long as relatives and friends have someone who can read and write in China, you can get a bank account with his/her help. In fact bank begs you to open an account.

140 points by methou 8y ago

fouc 8y ago

I wonder if paying with cash is an issue in other countries also? It might be possible to solve the issue of cashlessness by making it even easier for the poor to use it, perhaps by providing super cheap cards that somehow let people still make/receive payments without phones?

chvid 8y ago
There is a somewhat parallel discussion in Scandinavia on going cashless. Exactly the same issues: Poor people being marginalized, old people unable to use new technologies. And the uniquely Scandinavian; how to do "black work", work that is not reported to the tax authorities, without cash.
- lotsofpulp 8y ago
  Black work (and black money) is most definitely not uniquely Scandinavian.
  - TheCycoONE 8y ago
    It might be uniquely Scandinavian if that was seen by government as a concern rather than an advantage. It isn't clear if this is what the gp is saying though.
    - lotsofpulp 8y ago
      I know the governments in India/China/US don’t like black money. After a certain point, an organization gets so big that it’s more profitable for those at the top to make sure everything is accounted for rather than letting all the little minions take their cut. It would be beneficial for all of society if everything was accounted for, but only if everything was completely transparent, so that everyone can see what everyone is doing to hold each other accountable. Right now, we’re heading towards the worst system. The ones with the guns and bombs (power) get to see what all the masses are doing, but the masses don’t get to see what they are doing.
      - dis-sys 8y ago
        > I know the governments in India/China/US don’t like black money. for 99% Chinese, as of writing, the Chinese government doesn't care what they are doing when it comes to personal tax. the fundamental difference here is that 90% of the tax collected by the Chinese governments are from companies, personal tax including those doing family business only counts for a very small %. that is the exact reason why small business vendors all started accepting mobile payment - they know full well that there is no tax risk for doing that. things only become different when you are the big fish in the pond - if you only have a few million $ worth of black money, the safest place to keep it is your local branch of the biggest state owned bank.
        Loughla 8y ago
        That just seems so arbitrary and dangerous. SO there is no risk right now. But what happens if I make the wrong person mad? Now there's a trail of cash that I haven't paid tax on, and they've got me. It just seems like a way to bake possible governmental control into an uncontrollable system like black money.
        dis-sys 8y ago
        > But what happens if I make the wrong person mad? Now there's a trail of cash that I haven't paid tax on, and they've got me. always pay your tax OR be nice. both are actually easy!
        Loughla 8y ago
        >that is the exact reason why small business vendors all started accepting mobile payment - they know full well that there is no tax risk for doing that. Your statement. I understand that to avoid getting caught for breaking the law, don't break the law. But this conversation was in the context of black markets and their 'no risk' existence at the good graces of the Chinese government. What you call 'no risk' is actually just hard-coded blackmail from the government, I believe.
- sharpneli 8y ago
  From Finnish perspective: Banks are mandated to provide basic accounts and Visa Electron equivalent cards to anyone applying. This is because social support and pensions are paid to bank accounts instead of as cash.
  - hocuspocus 8y ago
    It's a EU directive: https://europa.eu/youreurope/citizens/consumers/financial-products-and-services/bank-accounts-eu/index_en.htm https://europa.eu/youreurope/citizens/consumers/financial-pr...
  - gowld 8y ago
    In USA debit cards are a common way to receive benefits, but there's no bank account attached. A bank account wouldn't add much though, except perhaps a persistent long-lived account number which might be useful.
  - clubm8 8y ago
    That law sounds good, but does Finland have the same issue as the US with regard to fraud protection? In case you're not familiar, US debit cards are tied to a bank account, but weirdly can be used without a PIN if they are run as a credit card anywhere that takes MC/Visa/whatever-the-issuer-is. However, the charge is deducted immediately from your account as would a debit charge. This means if there's fraud, even if you are refunded eventually you will be without access to money for some period of time. The easy fix is to withdraw some cash for day to day stuff from a trusted bank ATM rather than constantly swipe your card. Even if the government provides you a no frills bank account, the fraud risk would make many prefer to use their card as little as possible in the USA.
    - kalleboo 8y ago
      VISA Electron (and I believe Maestro, the MasterCard equivalent) cards only support "online" transactions, so they're able to reject transactions without a PIN, without enough money in the account, etc. They don't even have embossed numbers so you can't run them in one of those old carbon copy machines. This is why they are issued to people who are underage or a credit risk since they can't run an offline transaction without coverage in the account.
superkuh 8y ago
I recently attempted to buy dinner at my brother's wedding (in the middle of the USA) from a food truck. I was unable to because they only accepted transactions from corporate people on behalf of actual people (credit cards). They would not accept any form of payment (or even let you order) if you were just an actual human. Not accepting cash is a form of economic racism. And it's slowly creating sunset towns where normal people trying to transact with other people aren't allowed. You have to have a corporation vouch for you.
- seanmcdirmid 8y ago
  On the other hand, you can almost get by in the USA without any cash at all. Ever since I’ve returned from China to the stares, I’ve been to an ATM twice.
kalleboo 8y ago
I went to Sweden this summer and there were quite a few shops (including restaurants in the airport) that were "Card or Swish only", and one bar I went to was Swish-only. Swish is a local mobile payment system tied to Swedish bank accounts.

ForHackernews 8y ago

It seems like the Chinese government would be happy to subsidize cashless payments for the surveillance potential alone.

weliketocode 8y ago
Would the population greatly reduce spending on large swathes of items for exactly this reason?
- venatiodecorus 8y ago
  that would be quite terrifying if it were to occur.

EZ-E 8y ago

> When apps are built on the assumption that residents of a specific community are formally enrolled in a bank or financial institution, the unenrolled are simply locked out of being able to pay Ironically I recently realized tourists visiting China might be victim of this too. If you're coming to China you won't be able to do much until you open a bank account and get a local phone number. More and more restaurants or stores only accept mobile payment using wechat/alipay but short term visitors won't be able to open a bank account (even if you try these days, many banks will refuse you if you have a tourist visa). Visitors also won't be able to get a subway card on their phones, can't rent shared bikes, and won't be able to order a taxi using the local "uber" because all of these require a local bank account too. Even my local coffee shop only accept payment through their app with gives you a QR code to get your coffee, no cash. Even more ironic, if you do go through the trouble, open a Chinese bank account and use the local payement apps (WeChat/Alipay), you won't be able to use it back in your country - even if the stores in the airport accept Alipay for example, only users with a Chinese ID can use it outside of China.

techsupporter 8y ago
This is why you’re starting to see services like Swapsy and Megachange. They take USD via PayPal and “convert” or “match” it to RMB in WeChat and Alipay. I think you’re right though: this is going to be a concern for tourists to China. Maybe that won’t be a concern for the locals or maybe the cashless services will figure out some way to take foreign cash for electronic credits, like these exchange services are doing.
- brianwawok 8y ago
  How big is Tourism in China? Quick google tells me 2%? https://www.statista.com/topics/1210/tourism-industry-in-china/ https://www.statista.com/topics/1210/tourism-industry-in-chi... China isn't a tropical island country with 75% of income from Tourism. It may be an acceptable risk to inconvenience tourists to have the desired local monetary policy?
  - setr 8y ago

olalonde 8y ago

That just sounds like banks are worried about getting disrupted by mobile payments. Even beggars in Shenzhen accept Wechat payments these days so I am not buying the "think of the poor" angle. ATMs and banks lost a lot of their utility since the rise of mobile payments.

07d046 8y ago
The article mentions this: > In many cities, cashlessness is so common that panhandlers and street musicians use WeChat and Alipay QR codes to ask for change. But these anecdotal cases obscure some of the class-related issues that cashlessness can’t fix, and may worsen. The 2017 World Bank Global Findex database, which measures financial inclusion, estimated that some 200 million Chinese rural citizens remain unbanked, or outside of the formal financial system. Cashless payment systems by design require formal enrollment in banks, which are then tied to the mobile payment platforms that WeChat and Alibaba host.
- icebraining 8y ago
  Cashless payment systems by design require formal enrollment in banks I think this is the dubious claim. According to comments in this very thread and on other sites, you don't.
TorKlingberg 8y ago
As the article states, you need a Chinese bank account to use any of the new mobile payment methods.
- jpatokal 8y ago
  It's a bit more complicated than that: you can link WeChat to some credit cards, or get money transferred to your account. However, it's difficult to impossible to do this outside China and/or without a Chinese mobile number. Here in Australia, WeChat/Alipay are starting to proliferate in Chinese shops & restaurants, but it's impossible to join either locally. No shop that I know of will reject cash, but "cash or WeChat/Alipay only" is fairly common.

raxxorrax 8y ago

create anonymous depots and I would gladly use cashless transfers more. Currently, I just don't see the benefit. I use both forms of payment. Wouldn't like missing one of them. But especially in China, where buying the wrong products might be bad for you social score, I would vastly prefer cash. I wouldn't want to get any data in the hands of insurance companies either. Cashless payment is easier? Depends on the scenario. I can just give anybody 20 bucks without any third party involved. You cannot beat that with any technical solution.

usaar333 8y ago
> I can just give anybody 20 bucks without any third party involved Well, sure, if the good costs $20. If it doesn't, hope they have change. Or you have change. And carrying around tons of change is definitely painful.
- raxxorrax 8y ago
  Or I will let them keep the change because I am a generous person.

ElBarto 8y ago

Banks feel threatened because these payment platforms bypass them. In my view, there is a real concern that these platforms are becoming major financial institutions without being subject to financial/banking regulations. At some point the Chinese government will have to look into that.

TheBobinator 8y ago

The problem with a cashless society is, much like global warming, politicans have dug themselves a literal grave on the policy. It takes a really special kind of totalitarian a-hole to actually believe any tax, like a carbon tax, could save planet earth. Conceptually, on an academic level, that's right up there with blame the jews for our woes and lets gas them, or lets enslave the savages and breed them for fun and profit. We don't discuss new technology, or restricting reproduction\austerity measures, or hard science. And we certainly don't put money into a space program to, at the very least, give people hope for the future so they can accept some pain now because hey, thats hard. Nope, a Tax will save the world. As soon as you float that idea, People intrinsically know you are detached from reality and are the kind of dangerous where you'd kill 99% of the population to make a buck, and they take the logical steps of demonizing and ignoring you and defend their lives. Heaven forbid the research and consensus is completely true and accurate. Similarily, we have all kinds of social problems that are caused by what exactly? We don't really fully know, and heaven forbid we ask people, or request they participate in surveillance and research for communal profit and post the data publicly. It takes that same special kind of a-hole to think standing up a surveillance state so that they can continue to engage in the bias of believing in whatever they want to believe in and try to drag everyone else along with it is a good idea. That is what is really going on here. You are the product, and what do we do with products when we're done with them? When government and corporations become the consumers, it turns everyone and everything into literal trash. The chinese government has shown, repeatedly, their ignorance and arrogance on the world stage. I certainly hope the best to them in building an ideal society, and they have a lot of work to do learning their way through that one. I hope they come to find a better way and that I am wrong. But I'm not holding my breath.

thoraces 8y ago

Maybe Alipay/WeChat can use their vast amount of money and deep connections to Chinese manufacturing to make simple devices that literally only act as a wallet (hopefully simply enough such that even the elderly and technically/actually illiterate can use them), and then partner with banks (or become ones themselves) to provision bank accounts for people who they sell those devices to. If enough vendors stop accepting cash, then that alone ought to be reason enough for people in rural areas to make the effort to get/purchase these devices, assuming Wechat/Alipay makes the effort to distribute them. Though it seems that there is limited market value to doing such a potentially expensive and politically tricky maneuver. Classic scenario in a capitalist world—the market doesn't see profit in protecting a helpless class like the poor and elderly, so the market proceeds to ignore them and screw them over.

vorg 8y ago
This would be the banks moving into the cellphone market -- a good way for them to counter phone-based intrusion into their business model by WeChat/Alipay.

DINKDINK 8y ago

Related reading: "If plastic replaces cash, much that is good will be lost – Brett Scott | Aeon Essays" https://aeon.co/essays/if-plastic-replaces-cash-much-that-is-good-will-be-lost https://aeon.co/essays/if-plastic-replaces-cash-much-that-is...

dis-sys 8y ago
it is so funny that the author just jumped off an international flight with his complained jetlag, yet he choose to praise cash when he couldn't buy coke from a vending machine using his foreign credit card. he further mentions that "Cash transactions are peer-to-peer, requiring no intermediary, and are thus transactions that Visa cannot skim a cut off", I really want to know how to buy a can of coke in Netherlands using Chinese Yuan/USD/Japanese Yen in cash in such a "no intermediary" no "cut off" fashion.
- DINKDINK 8y ago
  >I really want to know how to buy a can of coke in Netherlands using Chinese Yuan/USD/Japanese Yen in cash in such a "no intermediary" no "cut off" fashion. It's almost like we would need a digital, global, censorship resistant currency
  - mmt 8y ago
    One that actually works, with sufficient trust, still has "a middleman" (blockchain solutions implement this as many, distributed middlemen, IIUC, but that detail seems immaterial to an end user) and thereby still requires a "cut of" the transaction. What would be the transaction cost for a couple-euro-equivalent vending machine purchase, using Bitcoin today? What about the cheapest (per transaction) cryptocurrency out there?
    - DINKDINK 8y ago
      Bitcoin Layer 1 (on chain) ~= .09 euro Bitcoin Layer 2 (lightning network) ~= 0.0005 euro Source: https://twitter.com/alexbosworth/status/1029425619350642688 https://twitter.com/alexbosworth/status/1029425619350642688 These costs are independent of the bitcoin amount transfered. >blockchain solutions implement this as many, distributed middlemen, IIUC There are no "middlemen" required to transfer bitcoin via layer 2. "Middlemen" required to transfer bitcoin via layer 1 are miners and a peer (could be the miner) to relay a block to you.

larrysalibra 8y ago

I agree with the directional sentiment of the article that a cashless society is bad for the poor and for other disenfranchised members of society. I don't see the "many places will not accept cash" problem that the article suggests is widespread. I'm in Shenzhen once or twice a month and haven't had any problem paying with cash - taxi drivers and vendors don't complain. Vendors being unable to give change for 100 CNY bills was a frequent problem 10 years ago and is still periodically a problem. More often than not the solution is still the same as it was 10 years ago: insist that this is all you have. Half of the time the vendor really does have change and just didn't want to give it to you. The other half of the time the vendor really didn't have change and will ask a neighboring shop for change.

ArtWomb 8y ago

Rise and fall of China's largely unregulated P2P lending startups is another cautionary tale. Over 5000 companies existed at its peak a year or two ago. And many have collapsed leaving investors protesting in the streets. Scoring risk and determining borrowing rate at scale could see tremendous efficiencies once a lot of data is obtained. Square Capital, for example, simply uses a fixed rate around 10% against sales that is automatically deducted from daily tills. But for micro-transactions, I don't see why 4-5% can't be achievable. If the global rate of repayment skews much higher. https://technode.com/2018/08/02/the-rise-and-fall-of-chinas-online-p2p-lending/ https://technode.com/2018/08/02/the-rise-and-fall-of-chinas-...

dis-sys 8y ago
nothing about borrowing here, it is about paying out of your own pocket to pay for taxi or dinner. alipay is reporting losing 5 Yuan out of handling every 10 million Yuan of transactions. that is the risk level for the topic matter.

ppeetteerr 8y ago

The real crime here is the amount of tracking that happens on foreignpolicy.com . Holy-Surveillance, Batman! For realz tho', greater marginalization of the poor thanks to a move towards digital reminds me of the many services that require an active internet connection. I once had an internet provider ask that I look up their online FAQ if I had trouble installing my internet connection. (thanks local ISP!) It's like the saying goes: "it's expensive to be poor".

deleted 8y ago

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dis-sys 8y ago

It is a poorly written article. The biggest risk is never about the social disadvantaged groups that could be marginalised by mobile payment, Alipay and Wechat have all business motivations and resources to get them sorted. Just look at how Didi paid both taxi users and drivers money to use its app a few years back. Don't have a mobile phone to use Alipay? Surely Alibaba can get you one with pre-loaded ads and Alipay - cheapest brand new 4G android phone on taobao.com is $30. Don't know how to use it? Surely they can get someone to teach you in person - average hourly wage is just $4! The real risk is the fact that Alipay and Wechat can now ban anyone from having a normal life in China - they can suspend your alipay and wechat accounts and you are totally screwed.

greatabel 8y ago

The real situation is: as long as relatives and friends have someone who can read and write in China, you can get a bank account with his/her help. In fact bank begs you to open an account.