Some Chinese private mobile payment apps are at risk of being canceled or nationalized as China’s mainland media and the central bank officials have been touting the digital yuan.
According to a U.S.-based news outlet, news has been spreading recently on the internet in China that the relevant agencies of the People’s Bank of China may cancel the use of digital payment tools WeChat Pay and Alipay.
Alipay, owned by Ant Group, and WeChat Pay, owned by Tencent Holdings, are two Chinese mobile wallet titans. The two tech giants are controlling more than 90% of the mobile-payment market between them.
According to Bloomberg, these private payment softwares have been dominating the retail payment sector in China over the past decade.
There have been recent reports on the state media attacking WeChat Pay and Alipay. They claimed that the mobile wallets had security vulnerabilities. At the same time, they praised the digital yuan, or E-CNY, which is developed by the People’s Bank of China.
Netizens worry that WeChat Pay and Alipay could be taken over into state ownership and replaced by the digital yuan.
According to Bloomberg, Chinese authorities may not like the idea of the valuable customer data and the funds flowing in just two large, private companies.
The People’s Bank of China deputy governor Fan Yifei said at a forum on digital finance earlier this year that it was necessary to standardize, among other things, the two-dimensional barcodes so that “merchants can support various payment tools without increasing costs.”
The authorities are seeking to push for a unified QR code because they want to give a leg-up to the digital yuan.
Once the digital yuan could become a really new instrument of payment, WeChat Pay and Alipay may struggle to survive.