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The View | China’s digital yuan is not death knell for Alipay and WeChat Pay
- China’s digital payment market is big enough for the e-CNY, Alipay and WeChat Pay to survive and thrive alongside one another
- The digital currency will benefit from more visibility while payment platforms will benefit from the additional payment flows generated
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Rather than being the killer so many predict, China’s new central bank digital currency will have a symbiotic relationship with payment platforms Alipay and WeChat Pay. This might surprise those who have read that the payment platforms face certain death at the hands of the digital yuan.
Much attention is focused on the digital yuan given its coming-out party at the Beijing Winter Olympics and recent launch of its chart-topping app. It’s easy to see why Alipay’s and WeChat Pay’s future seems dim.
The reality is quite different. All of these payment options will play off each other’s respective strengths, to mutual advantage. To see how, let’s address some common misconceptions about the digital yuan, or e-CNY.
Both payment platforms are rolling out e-CNY as a payment option, and neither is excluded from using the digital yuan. My Alipay app already sports a prominent red e-CNY symbol and has a wallet available to accept and spend the currency.
While integration on Alipay and WeChat is far from complete, it is clear the People’s Bank of China has always intended coexistence. In December 2020, senior officials said “WeChat and Alipay are wallets, while the digital yuan is the money in the wallet.”
Some point to a perceived asymmetry of benefit with the e-CNY’s presence on the payment platforms with their vast user base. The e-CNY gains from visibility, but what’s in it for the platforms in lending visibility?
Rich Turrin is the international best-selling author of “Cashless - China’s Digital Currency Revolution” and “Innovation Lab Excellence.” He is an Onalytica Top 100 Fintech Influencer and an award-winning executive previously heading fintech teams at IBM following a 20-year career in investment banking. Living in Shanghai for the last decade, Rich experienced China going cashless first-hand.
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