- China’s digital yuan test in Shenzhen has resulted in a lukewarm reception
- Users said that the app was less convenient than the established payment methods and that it had little to offer
- The government could tie bundles and usage incentives to the final product to incentivize users
Much has been made of China’s digital yuan program, a program that made headlines last week when it was announced that 50,000 residents of Shenzhen were in line for a 200-yuan ($30) airdrop that they could use to trial the system in participating local outlets. If China was hoping to add the cherry to the publicity cake following years of secretive CBDC development, it will have been disappointed to find a somewhat lukewarm reception from users, with complaints raised about the convenience of the digital yuan app and doubts raised over its chances of usurping the popular WeChat pay and Alipay apps.
Digital Yuan Fails Usability Test
Following all the hype around the first real world test of the digital yuan, the Chinese government may well have been hoping for a better response than they got from users. Reuters reports that many Shenzhen residents were skeptical before the trial, with the general consensus seeming to be that the digital yuan and its associated app would have a hard time outperforming Alipay and Wechat Pay, both of which are firmly embedded into the daily life of many Chinese citizens.
This was echoed in usage, with Reuters reporting that users felt somewhat underwhelmed by the experience, with one user saying that she wouldn’t use it again.
App is “Quite Late” to the Digital Payment Party
As well as being less convenient in its current form, Reuters reports that users also doubted that the digital yuan had a chance of uprooting WeChat or Alipay because it was “quite late to just start the trial”. The government will therefore have to work on its incentives strategy, with G. Bin Zhao, senior economist at PwC China, telling Reuters that the government may include usage incentives and tie it to subsidies, pension accounts, or state sector paychecks in the future.
Of course the purpose of a trial is to find out what is good and bad about a product, and it is clear that the government will take lessons from the digital yuan’s first outing to make it more attractive to users.