WeChat has become the second platform after Alipay to support payment methods using the digital Yaun. WeChat is China’s leading social networking and payment app, and it has been making huge strides within the payment and networking sectors over the years. Recently, a local media in China announced that the social media/payment company would be integrating China’s CBDC as part of WeChat payment methods.
According to the report from China’s local media, “it is currently possible to use the digital RMB wallet for payment through the WeChat App, and it has already supported the use of some WeChat mini-programs and other scenarios, and more scenarios are gradually being opened.” The reason for introducing China’s CBDC to WeChat payment methods was to increase the volume of transactions it has performed. So far, China’s CBDC has had a very slow start that doesn’t meet the expectations of many experts.
Tencent Holding operates WeChat Pay, and the primary target audience for the payment app is the Chinese. It has about 1 billion users. The move by WeChat will obviously contribute to the number of people using the digital Yuan for transactions. Its direct rival, Alipay, owned by Alibaba Group, has been offering the digital Yaun for quite some time now. But it is expected that introducing the digital Yuan on WeChat Pay will bring a big boost.
It was last year in December that China’s largest third-party payment platform Alipay started accepting and processing payments using the digital Yuan. It allowed its users to pay for food, groceries, and other transactions using the digital Yuan. Also, e-commerce apps were allowed to transact with Alipay using the digital Yuan. WeChat Pay follows the same pattern as it will allow its users to pay for food at restaurants and make other payments online. Although Alipay started offering digital Yuan payment services last year, it is expected that the large user base of WeChat will help them reach more transactions than Alipay.
China’s Digital Yaun Increases in Value
The new integration by two heavyweight payment platforms in the name of WeChat and Alipay has helped increase the number of transactions recorded with the digital Yaun.
Richard Turrin, a Shanghai-based fintech consultant, told news sources that China’s CBDC needed WeChat to boost the number of transactions they had at the moment. He said, “It is very clear that the digital yuan must be usable on both WeChat Pay and Alipay. WeChat Pay is the dominant social network, so if you want to be able to send money to people, you have to be on WeChat. Alipay is probably less important, marginally less important than WeChat, but because of its use in e-commerce, it is also an important place to be able to use the digital yuan.”
Yifan He, chief of Red Date Technology, pointed out that the reason the digital Yuan didn’t experience a quick breakthrough was that its use cases were very regular. It looked like a regular bank account.” For end users, using the e-CNY wallet is like you have to manage an extra bank account. It doesn’t give [users] many benefits nor convenience.”
With the introduction of the digital Yuan on Wechat payment methods, it is expected that more people will start using the CBDC for offline and online transactions.