Chinese super app WeChat is the second multipurpose social media platform in the country, after Alipay, to integrate digital yuan payments.
WeChat has integrated the digital yuan into its platform to facilitate faster and more seamless user payments. The move by the leading Chinese social networking and payment app also serves to broaden the appeal of e-CNY.
WeChat is the second local payment platform to support the digital yuan after Alipay. According to Kandong researcher Hu Hao:
“As the two mobile payment giants [in China], WeChat Pay and Alipay are expected to provide powerful support for the application and promotion of e-CNY through its express payment system.”
Both super apps offer many functions, from catering and retailing to medical services. These services are set up to ensure convenience on the respective ecosystems of Alipay and WeChat. In addition, the two super apps onboarded digital yuan payment schemes to reinforce customer loyalty in the face of rising competition.
As Trivium China analyst Linghao Bao pointed out:
“Chinese consumers are so locked in WeChat Pay and Alipay; it’s not realistic to convince them to switch to a new mobile payment app. So, it makes sense for the central bank to team up with WeChat Pay and Alipay as opposed to doing it on its own.”
The digital yuan’s pilot “Wallet Quick Payment Management” page currently shows 94 accessible merchant platforms, including WeChat.
The move comes amid the global adoption, implementation, and rollout of central bank digital currencies (CBDCs) across the globe.
WeChat Digital Yuan Functionality
The WeChat e-CNY feature enables the usage of the digital yuan for payment on certain mini-programs, as well as other platforms. Users can now pay bills or order food from McDonald’s using the CBDC payment feature.
The WeChat e-CNY payment feature is available to users in 26 cities, with more coverage and future payment scenarios to come. The Chinese all-purpose social media and payment app currently has a transaction limit of 2,000 yuan, or $289. In addition, WeChat currently has a daily limit of 5,000 yuan, or $720.
Users must first enable the digital yuan feature on their WeChat account and sync the digital yuan wallet operator with their WeChat-bound mobile phone number before carrying out CBDC-based transactions.
Since its introduction, the digital yuan has seen slow adoption in use cases across China. Almost two years ago, Beijing announced that the CBDC would be available for use at the Winter Olympics. At the time, government officials explained that the sporting event would serve as a testing ground for the digital currency’s applicability.
Early CBDC Adoption
China was one of the first countries to roll out a central bank digital currency. Other early adopters of government-backed digital currencies include Nigeria (eNaira) and the Bahamas (Sand Dollars).
CBDCs are a derivative of the emerging crypto space, although CBDCs remain ‘centralized’ and government-issued.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
Source: https://www.coinspeaker.com/wechat-digital-yuan-payment-functionality/