China’s e-CNY app adds WeChat Pay as ‘express payment’ option after Alipay, as sovereign digital currency’s adoption remains slow

WeChat Pay as an express payment option is now available to e-CNY users covered in the pilot scheme, which includes 26 cities
Mobile payment giants Alipay and WeChat Pay have both committed to help promote the country’s sovereign digital currency

China digital currency

Ann Caoin Shanghai

Published: 9:30pm, 7 Mar 2023

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China’s sovereign digital currency (e-CNY) app has added Tencent Holdings’ WeChat Pay as its second “express payment” option, nearly three months after initially having Ant Group’s Alipay for such payments on its platform.

The latest express payment option, called Weixin Pay on the mainland, is now available to e-CNY users covered in the ongoing pilot trials, which includes 26 cities and 5.6 million merchants across the country, amid the sovereign digital currency’s sluggish state of adoption.

“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,” said Hu Hao, a researcher at Beijing-based research institute Kandong.

Hu indicated, however, that the two mobile payment platforms would be “affected to a certain extent”, as they “adapt to how the digital yuan is processed”.

The mobile icons of China’s e-CNY platform and Tencent Holdings’ multipurpose WeChat super app are displayed on a smartphone screen. Photo: Shutterstock

Both Alipay and WeChat Pay have earlier committed to help promote the country’s digital fiat money. Alipay activated the e-CNY payment option on its platform in May 2021, while WeChat Pay followed suit in January 2022.

Getting both WeChat Pay and Alipay as express payment options on the e-CNY app shows an increased effort by the People’s Bank of China (PBOC), the country’s central bank, to spur adoption of the sovereign digital currency amid a lethargic take-up by consumers since pilot trials were started in 2019.

China’s e-CNY roll-out, two years ahead of any other global monetary authority, offers a crucial case study to India, Sweden, Japan, the United States and Britain, which are all in various stages of research or implementation of their own versions of central bank digital currencies.

The PBOC has long asserted that the e-CNY will not compete with WeChat Pay or Alipay because it was developed to serve as a substitute for M0, the monetary term for total physical notes and coins in circulation.

China’s e-CNY blues: major test bed shows sluggish adoption

The central bank has already included the digital yuan into its calculations of the amount of cash circulating in the economy at the end of December, when total outstanding e-CNY reached 13.61 billion yuan (US$2 billion).

China, however, has mostly become a cashless society because of the ubiquitous use nationwide of Alipay and WeChat Pay, each of which have hundreds of millions of daily active users on the mainland.

The two super apps each offer a myriad of services, from retailing and catering to medical services, that ensure convenience in their respective ecosystems to keep subscribers from looking to engage with other platforms.

The timetable for the e-CNY’s mass roll-out is yet to be confirmed by the PBOC, which has said that it must first formulate relevant administrative measures to enhance personal information protection for users.

Chinese economist calls for review of rigid crypto ban amid slow e-CNY adoption

“To ensure managed anonymity, we need to strengthen legislation and improve top-level design,” Mu Changchun, head of the PBOC’s digital currency research institute, said in September.

At a press conference last week, PBOC Governor Yi Gang discussed a number of major issues for the bank – including inflation, interest rate policies and financial sector reform – but made no mention of the e-CNY’s progress.

There were some people who have raised the e-CNY as a topic at this year’s “two sessions”, the country’s largest annual political gathering in Beijing, where delegates of the National People’s Congress and the National Committee of the Chinese People’s Political Consultative Conference discuss policy.

Fu Xiguo, president of the PBOC branch in the northeastern city of Shenyang, said in his proposal that Beijing should amend its banking law to “specify the form of digital yuan and clarify the legal basis for issuance”, while Jonathan Choi Koon-shum, chairman of the Chinese General Chamber of Commerce in Hong Kong, said the city could help foster the cross-border flow of e-CNY.

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