E-CNY use surges as apps offer new option
Electronic payments via China’s digital currency have enjoyed a stratospheric rise in a matter of days after the novel payment option was made available across the country’s major mobile apps.
Local services company Meituan said the number of digital yuan-denominated payments jumped 42.7 percent after connecting the Meituan app with the e-CNY app, which was developed by the People’s Bank of China, the central bank.
The transaction value of the digital currency via Meituan also surged 64.4 percent compared with a week ago, the company said, adding that the number of users adding the digital yuan payment option to the Meituan mobile wallet expanded almost twentyfold.
To link to two services, users need to first submit an identity authentication via the e-CNY app, the digital yuan wallet application developed by the central bank. The pilot version of the app was rolled out on Jan 4.
In a similar vein, Tencent-owned WeChat, China’s largest messaging app and one of the leading payment services, also began supporting the digital yuan last week via the WeChat Pay mobile wallet.
Once activated, the function allows users to receive remittances and pay for goods and services with digital currency in WeChat. The app also said it will explore the novel digital yuan payment experience in Beijing’s Winter Olympic Village, which is set to open on Jan 27.
Internet giant JD has made functionality available across an array of its online and offline assets, including JD’s e-commerce and finance apps, as well as 7Fresh — the fresh food chain supermarket it backs.
JD said all its proprietary automatic cashiers and smart POS machines now accept digital yuan as a payment option and relevant software development kits have made digital yuan compatible. The move aims to “allow more small and medium-sized merchants to experience the convenience of digital renminbi payments in more scenarios”, the company said in a news release.
“The official launch of the e-CNY app indicated a deep-dive experiment of the digital yuan,” said Wang Pengbo, an independent digital finance researcher. “User numbers are expected to enjoy a meteoric rise after these pilot trials.”
Back in May, MyBank, the online bank of Alibaba’s Ant Financial, became the first online lender to join a group of major financial institutions that have set up e-wallets using China’s digital yuan app.
PBOC Governor Yi Gang said in November that China would continue to advance the development of its central bank digital currency and improve its design and usage, including increasing its interoperability with existing payment tools.
Prior to the rollout of the e-CNY app, the central bank had only carried out trials in select cities, with banks handing out certain amounts of the currency under various occasions such as local shopping festivals. People also get to experience the digital yuan on an invitation-only basis.
But today, mega apps like WeChat — which has over 1 billion users — can provide the digital yuan with a huge boost if people begin to pay with it, analysts said.
According to Linghao Bao, an analyst at research firm Trivium China, the Chinese are so accustomed to the likes of WeChat Pay and Alipay that “it only makes sense for the central bank to team up with the usual daily mobile apps”.
“With the e-CNY app available in major mobile app markets, we are likely to see the pilot scope continue to expand to cover more users and more scenarios,” said Su Xiaorui, a senior analyst with consultancy Analysys. “The upcoming Olympic Winter Games in Beijing will likely boost the use of digital renminbi to a greater scope and depth.”