For the longest time, AliPay and WeChat Pay have been dominating the electronic transaction market in China. With the announcement and launch of the digital yuan, this landscape is set to change and it could be very fast.
A new and bigger player
In China, May 5 2021 has been set for a shopping festival and that is when digital payments will go into a frenzy. Expectedly, WeChat Pay and Alipay will both rake in transactions amounting to billions but 2021 could well be the year that will change all that. This is because some of the biggest banks have been persuading its customers to start using the digital wallet part of the pilot program that uses the digital yuan.
An alternative platform
The development of a sovereign digital currency has been in works involving the country’s major currency. This will set in motion new movements in the digital payment market and it is aimed at regulating the anti-competition practices. While the People’s Bank of China has claimed that it is not intending to use e-CNY to compete with Alipay or WeChat Pay, the marketing of the currency has proven otherwise.
The e-CNY is the China government’s initiative in venturing into the digital currency market. A portion of the physical Yuan of China is digitized and was launched in 2020 during its pilot program. 6 major banks in China have already been involved including the Agricultural Bank of China, the China Construction Bank, the Commercial Bank of China and the Bank of China.
Sources claimed that the e-CNY will have better security which is comparable to that of Bitcoin and will be used just like any other digital payment system (including WeChat Pay and AliPay).
It will be linked to some of the popular apps from China including Bilibili and JD.com but there are still no signs of integration with the other 2 giant payment platforms. Currently, the data of spending is controlled by both AliPay and WeChat Pay who collectively control about 94% of the online payment market in China. With the e-CNY, this will surely change as they are expecting a mass conversion of customers in an extremely short time.