Bank of China lets taxi drivers accept central bank digital currency payments on NFC mobile phones

The Bank of China is conducting a pilot in the city of Shenzhen of a new service that makes it possible for merchants to accept contactless digital currency payments on standard NFC mobile phones.

Peoples Bank of China logo

Taxi drivers taking part in the SoftPOS pilot use the bank’s e-yuan central bank digital currency (CBDC) app to enter the amount of a fare, Yicai Global reports.

Passengers can then tap a contactless card, known as an e-yuan hardware wallet, to the driver’s NFC phone to make payment, with no POS terminal or additional hardware required.

“Testing of the two-step contactless payment solution on Bank of China’s e-yuan app began in Shenzhen taxis last month,” the report says.

“Getting and opening an e-yuan hardware wallet is easy and can be made anonymously. These wallets have been popular among foreigners in China since the Winter Olympic Games in Beijing in 2022 because they are an efficient payment option for those staying in the country for a short period.

“The solution can significantly widen the use of e-yuan wallets, making it quick and easy for foreigners and the elderly in China to make payments, Dong Ximiao, chief researcher at China Merchants Bank-China Unicom Consumption Finance, told Yicai.

“These devices are easy to carry and convenient to use, Dong added. Shenzhen has more than 20 automated machines that have issued nearly 30,000 e-yuan hardware wallets, according to official figures.

“However, most devices receiving payments from these wallets are upgraded point-of-sale devices, with coverage still needing improvement. NFC offers a new and convenient payment method for e-yuan wallets.”

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