Geopolitics: the digital yuan breaks Visa’s monopoly at the Beijing Winter Games
The field of competition for the digital payment industry is the planet. Hence, each step taken by its different actors – governments, central banks, local financial systems, operators, etc. – has dimensions of a geopolitical nature. It is as if a great slab of the planetary-financial floor remained moved, waiting for new movements and adjustments.
It is a field of competition in which it is played, following the Simeonian principle from game to game, in each important event. Now it was the turn of the Winter Olympics, which will be held this year 2022 in Beijing. An event in which the Chinese authorities, especially interested in showing the great interest that their digital yuan has, have turned. In fact, they referred to these Olympic games as the Fiesta for their digital yuan. Like the coming-out party for your digital currency. And, for now, they seem to be winning the game against the credit card giant Visa.
Digital Yuan, Visa and Games
During the Olympic Games in recent decades, Visa had a monopoly on electronic payments in the areas of the venues where they have been held. A monopoly that was acquired through millionaire agreements with the International Olympic Committee. Agreements like the ones other brands have, so that their logos and products can be found in the corners of the venue of whatever it does as an Olympic village.
In the Olympic bubble, where athletes and their entourage live, including journalists from accredited media outlets, as well as in the stadiums, courts and spaces where the various events of the Olympic Games take place, the true Olympic god of payments it was Visa.
In other words, if you wanted to pay by card, not in cash, to pay for any good or service, such as a ticket to enjoy some of the tests or competitions, you had to pay through Visa. On this occasion, which was already an exception and shows the great interest on the part of the Chinese government. It was now competing with the digital yuan. The Government of the Asian country has ended a 36-year monopoly.
On this occasion, due to the risks linked to the pandemic, the Olympic bubble is even more of a bubble, with greater obstacles to getting out of it. It has become a kind of quarantine zone. In addition, the fear of contagion by contact favors the use of electronic payments, to the extent that it is done through contactless technology (without contact).
The way to pay in digital yuan works like a prepaid card. The difference is that paying with the card-application containing the digital yuan has less cost than paying with the Visa card or application. Keep in mind that, for each payment, the North American company charges a fee because it is an international payment. However, the Chinese card has no fees.
Taking sources from the Wall Street Journal , the amount of Chinese card payments during the opening ceremony of these Winter Olympics exceeded that of American card payments.
There are several lines of reflection to which such an event invites. On the one hand, the social acceptance of the Chinese payment method by the most varied international representation. That is, when facilities are provided and it is cheaper, the new product is welcomed by consumers. In this case, to make your payments. This, regardless of the nation of origin of the payment operator or the geopolitical war that is under the use of cards.
On the other hand, the deep suspicions that Visa may have of non-compliance with the agreement negotiated with the International Olympic Committee. An agreement that gave Visa exclusive rights to prepaid cards and payment services. In fact, the silence with which, until now, Visa has approached the matter is striking.
A silence that may be mediated by the secular difficult relations of this payment operator with the Chinese authorities themselves or by other more immediate issues.
Only recently Visa obtained a license to operate in the Asian country. A market dominated by Alipay and WeChat Pay. At least in the Olympic Village, Visa does not have to compete with these other operators. But, even so, it seems that this time Visa will not get the gold medal in these Olympic Games