POS machines help farmers step into new era

LANZHOU -- While Chinese urbanites stride toward a "cashless society" using mobile payments, many rural residents still face difficulty withdrawing money due to a lack of ATMs.

Wang Wenzheng is from the village of Daping, located deep in a mountain more than 2,500 meters high in Hezheng county, northwest China's Gansu Province. It is one of the poorest areas in China and is sparsely populated, making it difficult for banks to install ATMs here.

"We are not used to mobile payments here," Wang said. "For years, we had to climb over mountains just to deposit, withdraw or transfer money."

Soon, more people like Wang will bid farewell to the ordeal of accessing financial services, as Chinese financial supervisors are piloting "inclusive finance" services in the countryside, allowing rural residents to enjoy financial services at low cost.

In Gansu, for example, Chinese banks have teamed up with shop owners in towns and villages by giving them point of sale (POS) machines. Locals can deposit, withdraw or transfer money via the machines, solving the problem of having to install ATMs at high cost.

According to the Lanzhou branch of the People's Bank of China, more than 21,300 such "service sites" have already been established in the province, providing basic financial services for more than 22 million rural residents.

The financial site in Wang's village opened in 2013 in a small shop. The shop owner, Li Xiulan, installed a phone-like POS device with the bank's help. With the POS machine, villagers no longer have to travel over countless mountain roads to handle transactions under 5,000 yuan (752 U.S. dollars).

"Villagers usually come to withdraw money, and then buy some daily commodities in my shop," Li said. "This also increased my business."

The process is quite simple: if a villager comes to withdraw money, he or she deposits a certain amount of money into Li's account, and then Li gives cash to the villager. For a deposit, the villager gives cash to Li, who then transfers the amount of money to the villager's bank account.

Just a few months ago, Wang went down the mountains with his truck, but when he reached the nearby town his vehicle ran out of oil.

"I did not have enough cash, and I do not know how to use mobile payments," he said. "So I just called home, and my family transferred 500 yuan to me via the POS machine in our village."

Many towns and villages in Gansu did not have such inclusive services until 2012. Now, six banks in Gansu have jumped on the bandwagon, and their services have extended from money withdrawal and balance inquiry to remittance, money transfer, paying for daily services and repaying loans.

The State Council issued a circular at the end of 2015, promising support for POS machines in rural areas.

From January to September this year, about 120,000 withdrawals totaling 66.5 million yuan had been conducted via the inclusive service sites in Gansu.