Shanghai pioneers digital currency payments
With China putting the central bank-backed digital currency through its paces, Shanghai is among the pioneers trying out e-yuan payment.
The digital yuan is now on trial at selected spots in the city, including groceries, vending machines, fresh food markets, department stores and shopping malls.
Zhenning Wet Market in Jing’an District, for example, is the first of its kind to introduce a system supporting digital currency payment for its merchants.
To make an e-yuan payment, people need an account with any of the six state-run banks — Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications, and Postal Savings Bank of China.
At any of their branches, an e-yuan wallet smartphone app can be requested. Creating an account takes a few minutes.
The e-yuan wallet has a much neater user design compared with other major payment apps.
On the home page are three small icons for account details, scanning a QR code, and supplementary features.
Users can simply swipe up to pay or swipe down to receive payments.
With two sides both having e-yuan accounts, a payment can be made via the app, and the only information you need to fill in is the recipient’s mobile number or e-yuan wallet number.
At merchants supporting e-yuan payment, consumers can also use the “tap-to-pay” service. This allows users to make digital yuan payments without the Internet, with the help of NFC (near-field communication) technology.
Various objects carrying a chip for the digital yuan wallet can be a safe and convenient payment tool for people having trouble using smartphones or the Internet, such as the disabled and the elderly.
While the digital yuan can be used to support offline payments, it is more of an emergency measure. Given factors including the security of funds and chip storage space, limits will be set on e-yuan offline payments regarding the amount and the number of times. The limits will be reset each time after connection to the Internet.
Although easier payments without requesting passwords can be enabled for small-amount payments, it only works when users show their QR code for merchants to scan. Consumers will be asked to input passwords or turn to fingerprint or facial recognition if they want to scan others’ QR codes to pay.
With trials going on, the banks will step up efforts to improve current functions and bring in new ones. More promotions will be phased in to increase public awareness of e-yuan payment.
During the city’s Double Five (May 5) Shopping Festival, more spots will be found supporting e-yuan payment.
At Suning Mall, customers will be able to pay for shopping, transport, catering and entertainment with the digital currency, a general manager for operations said.
Meituan Group also announced its support in testing digital yuan payment during the shopping festival, allowing consumers to pay by e-yuan on some online platforms of the group and also in certain offline merchants which cooperate with Meituan.
Customers may receive extra discounts or coupons when paying with digital yuan.
Being backed by the central bank may maximize users’ confidence in the security of e-yuan. Despite that, people still hold doubts about its competitiveness and potential to become a common means of payment, especially at the time when Alipay and WeChat Pay, the two payment services backed by technology giants Alibaba and Tencent, have already covered almost all payment scenarios and are widely used by Chinese consumers.
The People’s Bank of China says the e-yuan is not set to compete with private companies’ payment services. Instead it serves only as a “backup.”