Alibaba eliminates the need for cash

Payment providers Alipay and Wechat have billions of users in China. Because the Chinese pay for everything with their smartphones, even beggars. Not everyone likes that.

Anyone who owns a smartphone in China pays with it - for the benefit of Ant Financial, a subsidiary of Alibaba.

“Just a couple of kuai,” asks the man, whose rows of teeth are full of gaps. With his thin arm he holds out a cardboard sign to the beautiful and wealthy on the left and right of Donghu Street in Shanghai, on which Porsche and Tesla drive up in the evening: a QR code surrounded by the blue of the payment provider Alipay.

The Chinese colloquially call their money, the renminbi, kuai. Translated it means “people’s currency”. The money is also called yuan, which is actually the name of the currency unit. The largest note is the 100 yuan note, emblazoned in red with the founder of the republic, Mao. Converted the amount corresponds to 12.50 euros. Just a few years ago, Chinese people from the hinterland who had become wealthy placed ten centimeter high stacks of money on the counter during their visit to Shanghai at the Grand Hyatt Hotel in order to rent the “chairman’s” suite for a week, which is one hundred square meters according to China’s communist one-party system measures more than the “Presidential Suite”.

The time of the big bundle is over now. China’s millionaires pull out their smartphones to pay not only in hotels, but also to give them to beggars on the sidewalk. After the smartphone scans its QR code, the merciful enters the amount for the donation in his smartphone. One click, a verification code, and the money goes to the skinny man’s Alipay account on Donghu Street.

Alipay and Co. are realizing the utopia of a cashless society

In the most populous country in the world, cash is not dead yet, but its importance is declining. And quickly. Surveys show that 40 percent of Chinese are already carrying less than 100 yuan in cash. In the first ten months of last year, the value of all payment transactions made through smartphone apps in the country rose 38 percent year-on-year to 81 trillion yuan.

The vast majority of payment transactions are still made with bills. After all, of the almost 1.4 billion people in the country, only 800 million use the Internet. But the trend is clear. A majority of China’s smartphone owners already state that they prefer to pay with their own phone – before cash and well before credit cards.

620 million users

Cinema tickets, rent, a pound of apples from the market woman and camel rides in Inner Mongolia – every bill can be settled with Alipay, a service with 622 million customers. Finding something that cannot be paid for with this service or its major competitor Wechat in China is becoming increasingly difficult. In the Middle Kingdom, whose risk-taking population enthusiastically embraces new technologies, the cashless society is no longer a utopia but a reality.