You know there are a lot of digital payment applications in the world that help make day-to-day transactions effortless, and this is technology. In India, famous digital payment applications such as Google Pay, PhonePe, Paytm, PayPal, online banking apps, and other payment gateways such as Instamojo, Razorpay, Openbank, etc. Similarly, different countries have different popular digital payment gateways.
There are two popular payment gateways in China: Alipay and WeChat Pay because they do not support outside companies to provide services in China. So then, is the digital yuan app different from other digital payment applications that we use in our daily life or something else?
What is The Digital Yuan?
The Digital yuan is Chinese currency and has the same value as the yuan in physical cash form. Still, the difference is that it is only available through the digital app or in digital format. The project of digital currency was initiated in 2014 by China. After taking some trials in different cities, China finally announced the digital yuan so the citizens can use the digital yuan for buying and selling and transferring money from one account to another.
Creating this digital currency makes China a digital country. The government can keep the records of unbanked transactions and make the more significant decisions according to citizens’ spending that you can read effortlessly on Yuan Pay Group
Many people in China are already using the digital payment applications that are very popular or famous in China, is Alipay by Alibaba group and WeChat pay by the Tencent company. So if the people are already making digital payments, how is the digital yuan application different from these two?
More from Finance
- Banxe Launches Debit Card To Spend Crypto, With Free Card Offer In February
- Do Self-Employed People Pay PAYE?
- Embracing eSignatures in Financial Document Workflow
- Expert Predictions For Payroll In 2024
- What Are ‘Discretionary Commission Arrangements’ Within The UK Motor Finance Industry?
- Introducing a New Era of Workbench Solutions
- 10 Reasons Why Financial Institutions Are Embracing VoIP
- What Is An Underwriting Workbench?
How Is The Digital Yuan App Different From Other Payment Applications?
The following points can help you to understand the other digital payment applications and digital yuan payment applications given below:
- Control: – The first and foremost difference between the digital yuan app and other applications is control. The digital yuan works under the government’s custody and the central bank of china. Still, the other digital payment applications work under third-party companies such as Alibaba and Tencent.
- Bankruptcy: – Alipay and WeChat pay works under the custody of the third-party companies, there may be a chance in the future of the default of these companies, and all the users have to bear the loss from it. But the Digital yuan application is under the government’s complete control, which means there is no question of bankruptcy. It is the same in the case of cryptocurrency exchanges that some exchanges got hacked, and the users lost millions of dollars from it. However, the cryptocurrency is decentralised, but these applications are centralised or under the control of third parties.
- Value exchange: – The primary motive for creating the digital yuan is to remove all the physical cash and coins from the country to make it fully digitalised so the government or central bank can prevent fraud, money laundering, tax evasion, and many other things. When we use the other digital payment methods, we cannot remove the physical cash because when someone pays us digitally and asks us to give the money, we will provide them with it since there is a value exchange. But it is not possible in the digital yuan app because it will remove the physical cash entirely, and you cannot exchange the value.
- Internet connection: – You know that without the internet, nothing works. If the internet gets stopped, many companies will suffer a loss of billions of dollars because their primary revenue source is from the internet. But the most prominent feature of the digital yuan application is that you can use it without the internet. It will automatically deduct money from your account and update your balance after doing a transaction that other applications are not providing this feature.
- Charges: – There are many popular payment gateways in the world like PayPal, Mastercard, VisaCard, AmericaExpress, Alipay, and WeChat pay that charge a decent amount for doing a transaction, and people have to pay the fees, but in the digital yuan application, you do not have to pay a single yuan for a transaction, claimed by the government and central bank of China.
- Motive: – The main explanation of the other digital payment applications is to make money by providing the payment gateway service through transactional fees, but the main reason for the digital yuan application is to make China a digital hub in the world.