Local retailers first to accept digital currency payments

Ding Yining
Shanghai's New World City, New World Daimaru Department Store and Taikang Food Store in Huangpu District handled several thousand virtual yuan transactions over the weekend.
Ding Yining
Shot by Ma Xuefeng. Edited by Ma Xuefeng.

Two local department stores and one food caterer became the first retailers to accept digital currency on a limited scale over the weekend, the latest sign the city is accelerating the trial run of rolling out digital currency in all walks of life.

Shanghai’s New World City, New World Daimaru Department Store and Taikang Food Store in Huangpu District handled several thousand virtual yuan transactions over the weekend.

Brand Director of Shanghai New World Li Wei said the company reached out to commercial banks to offer discounts on top of a sales campaign during International Women's Day on Monday.

"We have worked to upgrade the digital payment module ahead of the trial program, and we believe it offered extra stimulus for shoppers on top of the existing sales campaign," Li said.

He added that the company chose International Women's Day because female shoppers make the majority of online and offline purchases.

A Shanghai office worker in her late 40s surnamed Xu paid about 1,200 yuan (US$185) for a skincare set this morning.

"The payment procedure takes no more effort than other existing third-party services, and it wouldn't hurt to try to use the payment method at other places," she said.

Bank of Communications gave 6,500 local shoppers 100 yuan worth of virtual coupons to use when they pay with the Digital Currency/Electronic Payment (DCEP), China's official digital currency.

China Construction Bank offered 150 yuan worth of coupons to 2,000 people when they made purchases of more than 380 yuan. Participants were required to visit pre-selected local branches of the bank to apply for the e-wallet's trial use and add a DCEP application to their smartphones. The digital coupons will be added to their virtual wallets for offline payments.

Sales at New World City over the weekend were more than 10 times higher than the same period last year, as buying sentiment has rebounded from last year's lockdown and offline shopping restrictions. 

In the city's upcoming shopping season beginning in early May, digital currency payment capabilities will likely be available to all merchants on Nanjing Pedestrian Road Mall.

A Bank of Construction employee surnamed Zhang said it has prepared tens of thousands of eligible quota for individual users for the trial program that will involve more people in the future. 

Several hundred shoppers have used the Bank of Construction virtual renminbi app to purchase items at the New World City store, Zhang said.

According to local media reports, the e-currency payment process is similar to popular third-party payment services such as Alipay and WeChat Pay. People simply show a barcode from the app to be scanned by cashiers.

Recent e-yuan trial runs also took place in Chengdu last month, where more than 200,000 local residents were given digital coupons worth a total of 40 million yuan through an online drawing. They were able to use the coupons on JD.com and at 12,000 offline stores, including appliance retailers and caterers.

Former Bank of China chairman and head of the National Internet Finance Association's blockchain research committee Li Lihui said in a recent column that the issuance of digital currency benefits China’s financial safety and currency sovereignty. He suggested China accelerate the legalization of technology requirements for digital currency and optimize underlying technology structures and scenarios.

Song Lu, a researcher at the National Academy of Development and Strategy at Renmin University of China, expects a large-scale deployment of the new currency in the near future, citing the 2022 Winter Olympics in Beijing as an important occasion. He said it would boost the yuan’s global strength and status in the international settlement market.

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