Guiyang will soon become first "cashless city" in southwestern China, as the municipal government has announced an agreement with China's major e-payment provider Ant Financial Services Group, the financial arm of Alibaba Group on July 1.

A cashless city refers to a modern urban lifestyle in which digital payments replace cash. Residents in Guiyang will only need a smartphone, instead of physical currency, to make purchases.

Apart from supermarkets and shopping malls, six scenic areas, including Qingyan ancient town and Tianhe Lake, will also accept cashless payment.

Six scenic areas in Guiyang accept cashless payment. [Photo/gywb.cn]

Social and other civic local government services are also becoming cashless with the support of Alipay, a mobile payment app from Ant Financial.

A customer pays with Alipay, a mobile app at a supermarket in Guiyang. [Photo/gywb.cn]

Last year, more than 1.2 million Guiyang residents benefited from the Alipay's 32 payment services for government affairs, medical services and communications. Eight hospitals in Guiyang have also opened Alipay registration channels, which will serve more than 5,000 people per week.

Through the promotion of mobile payments, the city is also driving consumption. People gain credit through cashless payments and are eligible for fiduciary loans. As of this May, Ant Financial had granted 6.9 billion yuan ($1 billion) to individuals and 720 million yuan to startups.

Ant Financial exhibits its "smile to pay" facial recognition payment technology during the Big Data Expo held in Guiyang from May 25 to 28. [Photo/gywb.cn]