Beijing Has Become China's Leading Cashless Society

The breakneck pace of the adoption of online payment systems has led to the capital of China and its 21 million residents becoming its leading cashless society.

Beijing has been named the country's "smartest" city when it comes to making transactions through online payment systems, leading a list of first-tier cities that include Shenzhen, Guangzhou, and Shanghai.

The report was jointly made by the Chongyang Institute for Financial Studies at Renmin University of China, French market research firm Ipsos, and Chinese tech giant Tencent, whose massively popular WeChat social media platform now features online payment.

The report was determined by ranking 324 Chinese cities based upon indexes including transportation, education, shopping, and food delivery. The report also factored in the responses of more than 6,500 residents in a poll about mobile payments.

Beijing jumps to the front of a line of Chinese cities that have long been pioneering cashless transactions, such as Hangzhou and Shanghai.

Beijing recently debuted its first staffless convenience store while also introducing a new policy that would allow subway commuters to pay their fare with their phones. Additionally, Beijing residents can use their mobile wallets to buy everything from train tickets and movie tickets, to admission into the Forbidden City.

And it's not just Beijing. Transactions in rural areas and small towns make up half of all mobile payment users in China, said a report made by the Payment and Clearing Association of China.

According to the report, 84 percent of respondents said they were "comfortable" going out without cash in hand, while 70 percent said they could last an entire week with just 100 yuan cash.

Compared to other countries, China is way ahead of the curve when it comes to cashless payments. According to Bank of China, payments totalling RMB 157 trillion were made on mobile devices last year, more than 200 times the amount made in the USA.

At this rate, China may soon distinguish itself as one of the first countries to adopt paper money while also being one of the first to abandon it.

"I think it’s really very possible that China becomes the first or one of the first cashless societies in the next decade,” said Ben Cavender, a director at China Market Research Group.

Electronic payments occupy a niche left vacant by the inaccessibility of bank debit and credit cards to Chinese consumers, but there's one big reason behind the proliferation of mobile wallets.

"The government doesn’t want to slow down adoption ... that’s why they have kept their hands off," said Cavender.

Mobile payment systems have been touted by Chinese authorities as being one of China's "Four New Great Inventions," completing a list that includes high-speed rails, bike-sharing, and the country's 4G network.

Images: Hexun.com, Sohu.com

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