Within a week of its launch, China’s digital yuan wallet app surged to the most downloaded app in Apple and Xiaomi stores. However, its actual transactions have been far less impressive.
While the app has been widely installed, China’s cryptocurrency, or e-CNY, is only available for use in the ten mainland cities where trial programs have been introduced, like Shanghai and Shenzhen and the Winter Olympic venues.
WeChat Pay of Tencent and Ant Group’s Alipay have dominated 90% of China’s mobile payments market. The total transaction value of digital yuan payments is still tiny, at only 62 billion yuan ($9.77 billion), whereas Ant Group revealed that Alipay’s monthly payment transaction value averaged about 10 trillion yuan in 2020.
The e-CNY is currently accepted by internet giants, including JD.com, Meituan, and Trip.com, and can also be used to buy online plane tickets or pay mobile phone bills. However, it still has limitations compared to other competitors. One example is that the customer’s balance is not profitable.
Howard Qian, a Chengdu resident, said that, “The money I topped up in the e-CNY wallet won’t turn out any deposit interest. I’d rather store it in the money market funds in WeChat or Alipay.”
Howard added that he would only utilize the e-CNY app to continue receiving subsidies.
In order to compete with homegrown tech behemoths, China encourages the use of e-CNY in large-scale promotion programs.
Another Chendu resident, Robin Deng, said that, “I get 50 percent off when using digital yuan to take the subway.”
The South China Morning Post commented that, when discounts and other incentives are no longer offered, e-CNY might struggle to keep up the momentum.