China’s central bank last week fined seven businesses – including a KFC and branches of state-owned companies – for refusing cash payments, all as Beijing moves to make spending more accessible to foreign tourists .
The People’s Bank of China has imposed such sanctions for years. But the employees arrested this time worked for some of the country’s largest and most established companies, demonstrating how cashless payments have become so ubiquitous in this country.
The bank said it fined a KFC in Wuxi, Jiangsu, about $4,140 for refusing to accept cash from a customer who was ordering breakfast.
The employee responsible was fined approximately $410. According to the latest government data, the average salary in Wuxi is around $18,000 per year.
Other sanctioned companies include branches of state-owned conglomerates, such as a China Post branch in Inner Mongolia, a Gansu office for New China Life Insurance and a Jiangsu office for PICC Property and Casualty insurance company.
China has demanded that local businesses leave the door open to cash payments as it tries to attract foreign investment and tourism after the pandemic.
The country’s residents already relied heavily on cashless and QR code payments before the pandemic, and the practice gained popularity during the country’s years of lockdown. By the end of 2023, 86% of all payments in China were made via mobile phones, according to state media.
It has become a problem for foreigners arriving in recently reopened China, where they have struggled to find sellers accepting cash or even credit cards.
Hungry for foreign business, China has rushed to bridge the gap. Major payment platforms Alipay and WePay have started allowing visitors to link their international bank cards to their Chinese accounts. Single transaction limits for foreigners have also been increased from $1,000 to $5,000.
This year, Beijing asked businesses such as three-star hotels and taxi companies to start accepting international credit cards.
The large-scale transition has so far been slow: A taxi company in Shanghai, for example, announced in April that it would have 50 taxis accept foreign credit cards. Travel agencies say there are more than 50,000 licensed taxis in the city.
Tourism is a major source of revenue for China, and state-affiliated researchers predict the sector will bring in around $800 billion in 2024.
But international arrivals are lagging behind. Only about 35 million foreign visitors traveled to China in 2023, about 30% of pre-pandemic levels.
China’s cashless wave has also raised concerns for the elderly, with a central bank survey revealing that 75% of the country’s seniors still use banknotes.
It is illegal in China to refuse cash purchases, and the central government’s crackdown has intensified in recent years. Regulators have fined businesses such as car dealerships that refuse cash, while state media touts the paper invoice as “the most basic payment instrument.”
Investor Relations for Yum China, which operates KFC in China, did not immediately respond to a request for comment sent by Business Insider.
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