China Restricts Contactless Menu Ordering Amid COVID-19

The Rise and Regulation of Digital Payments in China

Prior to the COVID-19 pandemic, digital ordering and payment systems were already experiencing significant adoption within China’s restaurant industry. This trend, involving smartphone-based ordering, represents a broader shift away from cash and traditional documentation throughout the nation.

Many restaurants, particularly in major urban centers, have implemented digital menus as a standard practice. This move is often undertaken to reduce operational costs associated with staffing.

Public and Official Concerns Regarding Digitization

However, the rapid and sometimes forceful implementation of digital solutions has encountered resistance from both the general public and governing bodies. A recent article in People’s Daily, the official newspaper of the Chinese Communist Party, highlighted this concern with the title: “Scan-to-order shouldn’t be the only option.”

Mandatory smartphone ordering is seen as limiting consumer choice and diminishing the personal interaction that some diners value. Furthermore, the requirement to use smartphones raises important questions regarding data privacy.

Utilizing a phone for ordering frequently necessitates access to a user’s profile on platforms like WeChat, Alipay, or Meituan. This provides restaurants with access to substantial amounts of personal data, potentially leading to unsolicited advertising.

According to the People’s Daily, officials from the consumer rights unit of the China Law Society have stated that these practices infringe upon consumers’ rights to data protection.

Addressing Concerns About Cashless Systems and Health Codes

China has also addressed the widespread adoption of cashless payment methods. In 2018, the country’s central bank declared refusing cash payments as unlawful and discriminatory, particularly towards individuals unfamiliar with electronic transactions, such as the elderly.

The increasing reliance on digital health codes, generated through the tracking of location data via SIM cards, presents another challenge, especially for senior citizens. Without a smartphone-enabled health pass, older adults may be denied access to public transportation, restaurants, and other venues.

To mitigate this digital divide, Guangdong province has begun allowing citizens to verify their health status by scanning their physical identification cards.

The Future of Digital Payments and the Digital Yuan

Despite these concerns, the trend towards cashless payment is considered irreversible. Official data indicates that the penetration rate of digital payments among China’s mobile internet users increased from under 60% in 2015 to over 85% by 2020.

Moreover, the government is actively accelerating the rollout of the digital yuan. This central bank-issued digital currency differs from third-party payment systems, functioning as the official digital equivalent of China’s physical currency.

Ultimately, the government seeks to balance the benefits of digital innovation with the need to protect consumer rights and ensure inclusivity.