China travel: changing cashless society hits foreign tourists who really want to open their wallets and spend

China travel: changing cashless society hits foreign tourists who really want to open their wallets and spend

Meanwhile, the use of cold hard cash was heavy as he bounced between Fujian, Guangdong and Sichuan provinces. In the end, he mainly opened his wallet only to pay street vendors, but also stall operators and hawker vendors often prefer mobile payments. They rarely accept international cards, and Cheung found that many did not offer change for cash transactions.

“Honestly, I see it as a challenge that comes with being a foreign tourist,” Cheung lamented. “China’s payment methods cater mainly to locals.”

The data shows that the number of foreign visitors has not yet reached China’s pre-pandemic levels

These kinds of payment issues that Cheung and other foreigners face pose a major challenge for Beijing to boost people-to-people exchanges as part of broader efforts to improve foreign relations and boost the country’s economic recovery.

China recorded some 424 million arrivals and departures in 2023, a 266 percent increase from the lockdown-hit 2022, according to immigration figures. Among them, 206 million were mainlanders, while 183 million were travelers from Hong Kong, Macau and Taiwan. The remaining 35.48 million trips were made by foreigners from other countries, accounting for only 8.37 percent of the total.

Ease of payment, or lack thereof, has been cited as one of the factors deterring foreigners from visiting China, in addition to other considerations such as the West’s push to disengage from China, and Beijing’s national security concerns and crackdowns related to them.

But in the grand scheme of hurdles, making it easier for foreigners to move their money should be among the easiest hurdles to remove, yet it remains problematic.

In July, WeChat Pay and Alipay, the two dominant mobile payment providers, allowed overseas tourists to link their credit or debit cards issued by Visa, Mastercard and several other major international operators, after years of restricting use of foreign bank cards due to Beijing’s strict financial and data controls.

The change allowed overseas visitors without a Chinese bank account to pay with WeChat Pay and Alipay as locals would, including registering with their real names.

Central bank data shows that more than 95 percent of Chinese residents have personal bank accounts and that the penetration rate of mobile payments has reached a world-leading 86 percent.

The data reflects how “modern financial services are easily and quickly available to people in urban and rural areas,” according to state media Xinhua.

That’s all well and good for most Chinese, but what about tourists and those who struggle with – or can’t afford – mobile devices?

Foreigners who link international cards to mobile payment apps are charged a 3 percent service fee for transactions over 200 yuan (US$28), and single transactions over 6,000 yuan (US$845) cannot be processed.

“Some foreign tourists are reluctant to use mobile payments,” said Charlie Chen, who manages Easy Tour China, a travel agency based in Guangxi.

02:27

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Chen said many tourists, especially those from Europe and the US, were reluctant to enter personal data into mobile payment apps due to privacy concerns, while visitors from Southeast Asia were relatively more inclined to use mobile payments in China.

Digital payments also pose a challenge for China’s senior citizens as society widely embraces cashless transactions. More than 75 percent of the elderly across China frequently use cash, and the percentage of those in rural areas who do so is higher, at 80.4 percent, according to central bank officials.

In China’s major cities such as Beijing and Shanghai, international cards issued by overseas operators such as Visa and Mastercard are accepted in business districts, popular attractions and transport hubs where foreigners are most likely to spend money.

Chen at Easy Tour China also said that fewer merchants — including some three- and four-star hotels — are now accepting international credit cards compared to before the pandemic.

“Cash is still the main mode of payment for overseas travelers,” Chen said.

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The main currency exchange locations for overseas travelers are airports and banks. However, travelers can be hampered by limited bank opening hours, excessive paperwork and the need to secure unexpected documents.

Withdrawing money from ATMs has also become more of a challenge, Chen added.

This is largely down to a steady decline in ATMs across the country since 2019. Central bank figures show the nationwide total fell below 1 million for the first time in 2021, and by 2022 there were more just under 900,000. Several thousand more were eliminated in each quarter last year.

At an annual business conference in early January, representatives of the People’s Bank of China pledged to optimize payment methods for overseas tourists by offering more convenient mobile payment services and expanding the acceptance of international credit cards.

However, no further details or timelines for such changes have been given.

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