It's so tough to pay cash in China that the government had to fine a KFC for not accepting banknotes
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- China recently fined several businesses, including a KFC, for refusing to accept cash.
- These are some of the most established companies in China, showing just how quickly cash has fallen from favor there.
- It's a problem for a China hoping to attract foreign tourists who aren't part of the cashless system.
China's central bank fined seven businesses last week — including a KFC and branches of state-owned corporations — for rejecting cash payments, all as Beijing pushes to make spending more accessible for foreign tourists.
The People's Bank of China has meted out such punishments for years. But the employees caught this time worked for some of the country's largest and most established businesses, showing how cashless payments have grown so ubiquitous there.
The bank said it fined a KFC in Wuxi, Jiangsu, about $4,140 for refusing to take cash from a customer who ordered breakfast.
The employee responsible was fined about $410. According to the latest government data, the average wage in Wuxi is about $18,000 annually.
Other fined businesses include branches for state-run conglomerates such as an Inner Mongolia branch of China Post, an office in Gansu for New China Life Insurance, and a Jiangsu office for insurance firm PICC Property and Casualty.
China has mandated that local businesses leave the door open for cash payments as it tries to attract foreign investment and tourism after the pandemic.
People in the country already relied heavily on cashless and QR code payments before the pandemic, and the practice accelerated in popularity during the country's lockdown years. By the end of 2023, 86% of all payments in China were made through mobile phones, per state media.
That's become an issue for outsiders arriving in a newly reopened China, where they struggled to find vendors who would accept cash or even credit cards.
Hungry for foreign business, China has rushed to bridge the gap. Major payment platforms Alipay and WePay started allowing visitors to link their international bank cards to their Chinese accounts. Single-transaction limits for foreigners were also raised from $1,000 to $5,000.
This year, Beijing has been telling businesses such as three-star hotels and cab companies to start accepting international credit cards.
The wider transition has so far been slow — a taxi company in Shanghai, for example, announced in April that it would arrange for 50 taxis to accept foreign credit cards. Travel companies say there are over 50,000 licensed taxis in the city.
Tourism is a major source of revenue for China, with state-affiliated researchers predicting the sector will bring in about $800 billion in 2024.
But international arrivals have been lagging. Only about 35 million foreign visitors traveled to China in 2023, or around 30% of pre-pandemic levels.
China's cashless wave has also prompted concerns for the elderly, with a central bank survey finding that 75% of the country's seniors still use banknotes.
It's illegal in China to reject cash for purchases, and the central government's crackdown has intensified in the last several years. Regulators have been fining companies such as car dealerships that refuse cash, while state media promotes the paper bill as the "most basic instrument of payment."
Investor relations for Yum China, which operates KFC in China, did not immediately respond to a request for comment sent by Business Insider.