On December 29, the People's Bank of China held a media briefing on the special rectification work of refusing to accept RMB cash.
Cash service is the most basic financial service, which plays an important role in meeting the production and living needs of the people, serving the real economy, and maintaining financial stability. Although mobile payment has had an obvious substitution effect on cash payment, the demand for cash in the mainland's economic and social development is still relatively strong. According to Luo Rui, director of the Currency, Gold and Silver Bureau of the People's Bank of China, at the meeting, at the end of November 2023, the balance of cash (M0) in circulation in the mainland was 11.02 trillion yuan (accounting for 3.8% of M2), continuing to maintain an upward momentum, with a year-on-year increase of 10.5%.
With the development of electronic payment, the cash collection and payment environment has undergone major changes, and the phenomenon of cash rejection occurs from time to time. In order to maintain the status of RMB as a legal tender and improve the environment for cash receipts and payments, the People's Bank of China (PBoC) has launched a six-month special rectification of cash refusal since October 2023.
Luo Rui said that the main purpose of carrying out the work of rectifying the refusal to accept cash is to maintain the legal status of the renminbi and ensure the basic requirements for the smooth use of cash, safeguard the legitimate rights and interests of the public, meet the needs of the public, especially the elderly and other groups, and ensure the harmonious development of diversified payment methods to meet the payment needs of different market entities.
On the same day, the People's Bank of China also issued administrative penalties for the special rectification work of refusing to accept RMB cash, and imposed financial penalties on two units and relevant responsible persons for refusing to accept RMB cash in accordance with the law. Specifically, the Beijing Huairou Branch of Chinese Life Property Insurance Co., Ltd. was given a warning and fined for refusing to allow the public to use RMB cash to purchase insurance, of which the unit was fined 190,000 yuan, and the management personnel directly responsible were fined 10,000 yuan. Beijing Dashixing Century Automobile Sales Co., Ltd. was warned and fined for refusing to allow the public to use RMB cash to purchase car insurance, of which the unit was fined 50,000 yuan, and the directly responsible management personnel were fined 10,000 yuan.
The willingness of some business entities to collect cash continued to decline
Starting from October 2023, the People's Bank of China (PBoC) will carry out a six-month special rectification of cash refusals, and will work with the member units of the consultation mechanism to organize commercial banks to solidly promote the special rectification work.
According to Luo Rui, as of December 24, 2023, a total of 1.411 million business entities have been surveyed. Commercial banks signed 751,000 "letters of commitment not to refuse to accept cash" with business entities, and guided business entities to post 397,000 signs supporting cash payments. 182,000 "coin purses" were distributed to business entities, and business entities with insufficient change reserves were reminded. Punishment is to be imposed on illegal entities with a high degree of public concern and a large scope of influence, and to be publicly exposed.
Zeng Zhicheng, vice president of the Beijing branch of the People's Bank of China, pointed out in his report on the administrative punishment of refusal to accept cash that from the perspective of penalty cases, there are two main reasons for the refusal to accept cash: First, the business entity has a weak sense of operating in accordance with the law and compliance, and lacks legal norms and business training for employees to carry out cash receipt and payment. Second, the business entity rejects or refuses cash payment on the grounds of cost control and risk prevention and control.
Zhang Meng, deputy director of the Currency, Gold and Silver Bureau of the People's Bank of China, pointed out that it is difficult to completely eradicate the refusal to accept cash, and some new situations have emerged at present.
First of all, the offline scenario is bundled with mobile payment. More and more offline business entities are adopting service models such as online reservation and QR code ordering, which objectively greatly reduces the use of cash, and even leads to the fact that offline services are no longer provided in some scenarios, making it difficult to use cash.
Second, the willingness of some business entities to collect cash has declined. In particular, the consumer group is biased towards young people, and the business entities with a low proportion of cash transactions are less willing to maintain cash collection and payment services, and are unwilling to increase spending on preparing change, equipping cash boxes, training cashiers, and going to commercial banks to deposit and withdraw cash.
Third, some commercial banks have insufficient cash services. For the sake of cost savings, the number of cash handling windows and ATM machines has been reduced, and the level of cash services such as change exchange and residual currency recovery has declined, which cannot fully meet the cash needs of customers, especially small and micro business entities, and has reduced the willingness of some business entities to collect cash to a certain extent.
"In this context, we organized and carried out this special rectification work to further build consensus on the illegal refusal of cash, solve the current outstanding problems, and solidify the long-term mechanism. Zhang Meng said that due to the long-term characteristics of the decline in the willingness of some business entities to collect cash, the rectification of cash refusal will be persistent and carried out in depth.
The elderly have a greater demand for cash business
Zhang Meng pointed out that the use of cash is mainly in rural areas and the elderly (over 65 years old). In particular, the elderly in the county are more dependent on cash.
According to the sample survey, more than 75% of the elderly regularly use cash. Among them, 80.4% of the elderly in counties and 67.6% in urban areas often use cash. In addition, small and micro businesses in wholesale and retail industries, as well as migrant workers in urban areas, also use more cash.
Zeng Zhicheng further introduced that based on the data from Beijing, it was found that cash deposits and withdrawals of individual customers are the most important component of cash deposits and withdrawals, accounting for about 85% of the total deposits and withdrawals of individual customers, and about 15% of all cash deposits and withdrawals for corporate customers, and the trend is relatively stable. From the analysis of the amount of cash business data over the counter, the demand for cash business handling for the elderly is greater.
Zhang Meng said that in order to improve the level of facilitation of cash deposit and withdrawal business for the elderly and other groups, the People's Bank of China organized commercial banks to carry out three tasks. Specifically:
The first is to fully understand the problems and demands of elderly customers in handling cash business, and make predictions and preparations for special needs such as pension payment and small and medium-sized denominations of RMB, so as to improve the forward-looking cash service.
The second is to organize business consultation and interpretation, classification guidance and handling in view of centralized access and other situations, so as to improve the efficiency of cash business handling.
The third is to provide the elderly with a priority window and green channel for cash business, and provide special cash services for the elderly with reduced mobility, so as to improve the temperature of cash services.
Effectively improve the level of payment services for overseas personnel coming to China
In addition to improving the facilitation of cash deposit and withdrawal services for the elderly and other groups, the People's Bank of China also attaches great importance to improving the level of payment services for overseas people coming to China.
Zhang Meng pointed out that in order to further improve the level of payment facilitation for overseas personnel in China, the People's Bank of China, together with the State Administration of Foreign Exchange, has established a special working mechanism, formulated a specific work plan, and issued the "Guiding Opinions on Improving the Payment Service Level of Overseas Personnel in China". Carry out a thorough investigation of the convenience of cash use in foreign-related scenarios such as mobile communications, catering and accommodation, parks and scenic spots, transportation, wholesale and retail, cultural and sports venues, and currency exchange points in areas where foreign visitors to China gather. As of December 24, 2023, a total of 98,000 merchants in foreign-related scenarios have been identified.
According to Yang Renrong, a member of the Party Committee of the Zhejiang Branch of the People's Bank of China, in order to improve the payment service level of overseas personnel in China, the Zhejiang Branch of the People's Bank of China launched the implementation of the province's payment facilitation project for overseas personnel, focusing on key areas such as "food, housing, transportation, travel, shopping, and entertainment" involved in overseas personnel, and actively establishing and improving the payment service system including foreign card acceptance, foreign currency exchange, cash payment, mobile payment, and digital RMB. At present, the province's key commercial outdoor card acceptance and transformation rate has reached 85%, the ATM foreign card transformation rate in key areas has reached 99%, and 2 million mobile payment merchants can accept foreign personnel. There are 5,700 bank outlets that have opened foreign exchange settlement and sales services for private purposes, and 2.67 million e-RMB merchants can accept them.
Zhang Meng said that in the next step, the People's Bank of China will work with relevant departments to give full play to the role of the special working mechanism, and continue to promote the use of cash, foreign card acceptance, mobile payment, account services, publicity and promotion and other tasks in accordance with the established work plan and goals, so as to effectively improve the payment service level of overseas personnel coming to China.
Do a good job in ensuring cash supply and continue to carry out the work of rectifying the refusal to accept cash
Creating a good cash flow environment takes a long time. Luo Rui said that the People's Bank of China has taken a number of measures to establish a long-term mechanism.
First of all, we should do a good job in ensuring cash supply, dredge the channels for the return of damaged RMB, and carry out in-depth anti-counterfeit currency work to ensure that the RMB coupons are reasonable, the face of the RMB is neat, and the holders can rest assured.
Second, we will continue to improve the cash service level of commercial banks. Jointly issued a document with the former China Banking and Insurance Regulatory Commission, requiring that cash deposits and withdrawals should not be arbitrarily ignored or suspended, and the clean-up and mapping work should be carried out, so that the overall recovery process was stable and related problems were effectively resolved. Organize commercial banks to maintain a reasonable scale of cash service windows and self-service cash machines, and urge them to do a good job in cash services such as the exchange of change notes and the recovery of damaged coins. Organize and improve emergency response mechanisms to improve the ability to respond to cash services in the event of natural disasters and epidemic prevention and control. Relying on the establishment of a grid working mechanism for commercial bank outlets, organize commercial banks to go out of outlets, carry out publicity, find out the cash receipt and payment situation of merchants, and provide door-to-door cash services in a targeted manner.
Finally, facilitate the smooth use of cash. Continue to carry out the work of rectifying the refusal of cash. Issued guidelines for cash receipts and payments, and put forward guiding opinions on cash receipts and payments in various scenarios. In conjunction with 12 ministries and commissions, a consultation mechanism will be established to rectify the refusal to accept cash, and to study and promote the resolution of major problems. In the next step, the People's Bank of China will continue to consolidate the relevant working mechanism, and continue to adjust in light of the new situation and new circumstances, and continue to optimize the cash circulation environment.
Editor-in-charge: Wan Jianyi
Proofreading: Peng Qihua
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