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Four Ways To Spend Money in China

By Logan Clements

· Travel

Originally posted on Logan's Medium account.

Are you getting ready for your first, third, or fifteenth trip to China? You’re probably wondering how you can pay for goods and services throughout your trip. No matter if you’re new to China or it’s your first trip of the year, you need to know how to spend your USDs (or any home currency) as RMBs.

I’ve been living in Shanghai for the past four years and ever since I got here making payments in China has continued to evolve. I’ll lay out your top four options and the pros and cons of using each on your next trip to China.

Cash

China is a heavily cash-based society. When I studied abroad in the summer of 2011, I only used cash. I’d found that it was the only method accepted by taxi drivers, cafes, restaurants and bars. Today, you have more payment options but you can never go wrong with carrying cash in your wallet.

China is a very safe country so you should feel comfortable carrying cash on you but just make sure it’s in reasonable amounts. Like in any city anywhere in the world, don’t flaunt how much cash you have in your wallet if you can help it as that might make you a target for pickpockets.

I like to withdraw cash from ATMs when I travel around China, so I don’t usually have too much on me at one time. If it’s your first time coming to China or you haven’t quite figured out how you’re going to get around your first day or two, it’s best to exchange cash before you leave your home country or at the airport so you have a little petty cash on hand for your early costs. This could be anywhere from $100–$200.

If you forget to do it before you leave home, don’t worry. Most of the airports in China have currency exchanges at baggage claim when you arrive or you’ll have access to ATMs once you exit into the public terminal.

And since you’ll be taking cash out from ATMs as you travel, don’t forget to pack your debit card and notify your bank that you’ll be traveling overseas. Nothing's more frustrating than landing in a new country and having your card denied when you get there. Save yourself the hassle of an international phone call and take care of that before you leave.

Credit and Debit Cards

Domestic Chinese cards are called UnionPay and are widely accepted across China. Unlike the US, UnionPay is the one domestic brand of debit and credit card. As a foreigner in China, you can open a Chinese bank account but each bank has different requirements. Some only need to see your passport and others need proof of employment in China.

It’s very difficult for foreigners to get a Chinese credit card so you’ll find that rare among expats living in China. Most convenience stores, cafes, hotels, and restaurants accept domestic cards but you won’t be able to use them in taxi cabs or at every subway station.

For foreign credit and debit cards, you can use them at most major restaurants, international hotels, and bars or cafes, especially if they cater to expat clientele. It’s always best to ask ahead of time if you don’t see a sign that they accept cards since I’ve had some places tell me no or say their credit card machine is broken (I’ve not always been confident that’s true, but saying it’s broken is the nicer way to say they don’t want to have to pay the transaction fee).

Visa is the most widely accepted international card, followed by MasterCard. It’s rare to find a business that will accept American Express and Discover but they are out there. Call your provider ahead of time to confirm your card’s travel policy and ask if there are any specific terms to using the card in China.

AliPay

Today, AliPay, owned by Alibaba, is one of the top two mobile payment methods in China. With over 520 million registered users domestically, AliPay first became popular as the sole payment method on TaoBao. You can now use your Chinese debit card as well as Visa and Mastercard on Taobao but AliPay remains the most convenient option.

To use AliPay, first download the app to your phone and link your account to your Chinese bank account. To pay with the app, you either show the cashier your QR code or scan their QR code to transfer money to the person, brand or business. Since it is linked directly to your bank account, it’s an instant transaction for the consumer. Right after I pay and confirm on AliPay, I get a text message from my bank saying my account has been debited.

QR codes never really took off in the US but in China they are everywhere. Businesses either will scan your phone as you display the QR code or you scan theirs and then type in the amount to transfer. AliPay has gone through several promotions over the years to drive user engagement, offering discounts if you pay through AliPay and expanding their reach through international partnerships to encourage Chinese tourists to spend money overseas.

Today, you can pay with AliPay at most convenience stores, cafes, restaurants, malls, movie theaters, and shops.

WeChat Pay

In competition with AliPay, WeChat Pay is owned by Tencent and integrates with the popular messaging app, WeChat. With over 500 million registered users domestically, WeChat Pay first became popular when they ran a campaign that went viral, encouraging WeChat users to use WeChat Pay to send 红包 hongbao red envelopes to their friends around Chinese New Year.

A New Year tradition, friends and family exchange gifts of physical red envelopes filled with money. WeChat Pay saw it’s user base increase dramatically when friends began using virtual hongbaos through WeChat Pay to celebrate CNY.

Similar to Venmo in the US, WeChat Pay allows you to easily send money to friends, split bills, or pay directly to vendors, restaurants, and companies. Certain movie theaters in Shanghai encourage you to book your tickets on WeChat, offering almost a 50% discount compared to the price at the box office.

With WeChat Pay, you can also top up your mobile phone bill, pay your utilities bill, book flights and train tickets, order taxis and much more.

Mobile payments in China are everywhere and it’s not unusual for people to have both. I use both AliPay and WeChat Pay on a daily basis living in China and rarely use cash or my debit card. I like to have around 200RMB or roughly $30 worth in my wallet just for emergencies. No matter which payment method you prefer, China offers you a variety of options as long as you plan ahead.

If you have any more specific questions about spending money in China and best practices, feel free to send me an email at logan@loganstrategygroup.com or tweet at me at @Loganmclements.

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