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As trials continue, an ecosystem of hardware and software evolves around the e-CNY

By CHEN JIA | China Daily | Updated: 2021-09-13 07:52

A visitor to the 2021 China International Fair for Trade in Services in Beijing makes a payment using the e-CNY at a vending machine on Sept 3. [Photo/Xinhua]

Bloomberg Intelligence forecast that the e-CNY's share of China's digital payments market may reach 9 percent by 2025, and will increase to 15 percent by 2030. The two largest e-payments companies-Alipay and WeChat Pay, which jointly command over 90 percent of the market-could lose some share to the e-CNY.

Some third-party payment service providers have seen big opportunities in the huge market, extending their footprint in e-CNY scenarios as early as possible. Analysts believe that the next big chance for agile entrepreneurs will be the 2022 Beijing Winter Olympic Games, and retail sponsors of the Games will be the leading group in the domestic use of the e-CNY.

Lakala Payment Co Ltd, a third-party payment service provider established in 2005 in Beijing, has participated in all the e-CNY pilot areas so far, including the development of the digital currency applications to be used during the 2022 Winter Games.

The company, which is also listed on the Shenzhen Stock Exchange, has developed products for e-CNY aggregate payments, digital wallets and digital bracelets. The main business of Lakala is to provide services in the area of the currency's circulation, including the expansion of e-CNY application scenarios, business training, equipment layout, system operation and maintenance.

"The upgrading and transformation of various types of machines and devices in our company have been completed, which all support the use of the digital RMB," said Tang Ling, senior vice-president of Lakala.

The company established a special department for digital payment services, and is one of the two payment institutions with which the PBOC has strategic cooperation agreements, Tang said.

By promoting the e-CNY via pilot programs, Lakala has created for itself a presence in the industrial supply chain, large supermarket chains, tourism, medical treatment and other industries that it had never entered before.

"We have completed the system docking with the Digital Currency Research Institute of the PBOC and six other major institutions engaged in e-CNY operations," Tang said. The company innovates technologies, including blockchain and hardware wallets, in different scenarios of e-CNY use.

Innovative uses of the e-CNY are under testing on the premises of the Beijing Organizing Committee for the 2022 Games, located in Shijingshan district of Beijing. These include unmanned vending carts, automated vending machines and unmanned supermarkets, said PBOC Deputy Governor Fan.

Wearable devices were developed for the Winter Games, such as gloves, badges and Olympic uniforms with payment functions. "Most users participating in the pilot tests agree that the e-CNY can help improve payment efficiency and reduce costs," said Fan.

Tang from Lakala said he believed e-CNY trials signify a new era in China's payments industry, following two decades of development based on information technology and mobile payments.

"The broad use of the e-CNY in China will bring great development opportunities to the payments industry, which may also change the structure of the industry."

Tang said Lakala will continually focus on innovations of the hardware wallet and supply chain services for e-CNY users and operators.

Lakala, Tang said, expects the digital RMB will help it to obtain a larger market share and win more long-term clients in the payments market.

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