China’s digital payment revolution is leaving Hong Kong in the dust
- China has emerged as a world leader in digital payments, with the mainland rapidly going cashless and moving to create a fully digital sovereign currency
- Meanwhile, cash remains stubbornly popular in Hong Kong as the Octopus card’s dominance has slowed take-up of other cashless payment options
Ten years ago, China was largely a cash-only society. Every six months, I would withdraw nearly 25,000 yuan (US$3,700) in bricks of red paper from the China Merchants Bank in Beijing’s Wudaokou neighbourhood, stuff it into my hiking rucksack and walk through the busy streets to pay my rent and tuition fee at Peking University. Yet, with more than a year’s money for a migrant worker on my back, I felt completely safe. Everyone had to do it.
The odds on the lottery were not bad, with some 2.61 per cent of applicants being successful. It is well overdue when you consider that the cashless society has been with us since the first modern credit card was pioneered by Bank of America in 1958 and licenced through what is now Visa.
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How mobile payments impact people’s lives in China
The digitisation of existing currencies is not brain surgery. It modernises the process of the issuance and supply of central bank currency, the interbank settlement system and the development of digital currency wallets within existing retail bank accounts.