People living in the most remote areas of China may also soon be able to pay using their mobile phones, as Beijing announced in February that it is looking to introduce cashless payments in rural villages by the end of 2020.
Plans were announced in an official document, along with a set of guidelines, released by five of China’s major regulating institutions, including the central bank, the Banking and Insurance Regulatory Commission, the Securities Regulatory Commission, the Ministry of Finance and the Ministry of Agricultural and Rural Affairs, as the country looks towards making the cashless trend more accessible to residents of far-flung areas.
The initiative has been launched with the aim of utilising small towns and countryside villages to boost China’s weakening economy, by digitizing the agricultural communities from acquiring loans to purchase fertilizers to leasing land to city developers.
As of 2017, 42% of the total Chinese population chose to live in rural areas, while the rest migrated to metropolitan cities and urban areas in search of higher-paying jobs, and subsequently, better quality of life.
While contactless transactions are already common in large cities, the trend has yet to take flight in less urbanized regions.
In 2017, the number of Chinese adults making use of digital payments stood at 76.9%. According to a report published by the central bank, the ratio was 66.5% in rural areas.
China’s Number One Document, which highlights the country’s national priorities for the year, was released shortly after the digital payments initiative.
This document has been dedicated towards focusing on China’s rural communities for the past 16 years, with digital innovation continuing to be one of the major targets.
Beijing is pressing for rural officials to speed up the diffusion of internet, the digitization of public services, as well as selling rural produce to consumers in bigger cities.
The initiatives invite huge payers in the game to look beyond the megacities and invest into setting up online channels enabling farmers to buy and sell, as well as network with local governments to forge logistics systems.