Alipay and WeChat pay are in trouble as China’s top banks promote Digital Yuan to be used in a huge upcoming shopping festival on the 5th of May this year.
According to sources, 6 Banks from Shanghai have formally made their decision to proceed with Digital Yuan as the preferred payment method for the shopping festival. This move has definitely threatened the position of WeChat pay and Alipay in the Chinese market.
Reports from Reuters indicate that the large-scale banks are promoting the Digital Yuan payment method, advising people to download digital wallets that support the digital yuan so that payments can be made easily in the festival without any issues. Local Payment methods like Alipay and WeChat Pay have been totally left out for the festival, not even allowed to be used as an alternative.
An anonymous Bank employee has stated that people of China should embrace the Digital Yuan payment method instead of the popular Alipay and WeChat Pay. The employee also said that Digital Yuan would prove to be much more convenient than the other methods and that the people of China will soon realize that when they use it in the festival.
Alipay and WeChat pay is still the country’s top payment methods with over 98% usage statistics, but the Banking system pushing the country’s own digital currency is definitely a threatening situation for Alipay and WeChat Pay. If the Bank’s claim of better convenience comes out to be true, then there is a chance that the current traditional payment methods might fall heavily against the digital Yuan. Although it will be very difficult to make people switch, it will surely have an impact on the current performance of Alipay and WeChat pay.
Digital Yuan an Alternative, not a Rival
The People’s Bank of China has said that Digital Yuan is not meant to target or gain competition in the market. It is mainly deemed as a direct alternative if the other payment methods have issues. Digital Wallets in China are still being tested. They are able to connect with certain apps like Meituan but are still not ready to connect to Alipay and WeChat pay, meaning that the people of China will not be able to transfer funds between wallets, and WeChat Pay/Ali Pay, making it more difficult for people to move money around to take part in the festival.