Digital RMB is so popular! Alipay can’t hold back

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With the popularity of digital RMB hardware wallets, the "payment card" patent may be Alipay's secret layout.

Written by Xiong Yuge

Produced by | Payment Encyclopedia

Recently, Alipay disclosed relevant patent information of a "payment card". Against the background of the increasingly popular digital RMB, Alipay has begun to re-examine the changes in payment methods. This patent may be aimed at the development prospects of the digital RMB.

According to Qichacha, Alipay (Hangzhou) Information Technology Co., Ltd. has disclosed a patent application for a "recharge-free data processing method, device, equipment and system for payment cards". Public information shows that the patent application was filed in December last year and is still under review.

-Payment card patent application information-

According to the patent specification, the main function of the patent is to "associate payment cards that need to be recharged before they can be used normally with payment accounts in the payment platform, and use the payment account of the payment platform as the debit account for the payment card."

It is not difficult to see that this patent of Alipay is aimed at the problem of physical card recharge. If the deduction of physical cards is directly carried out in the payment account, it means that users will no longer need to recharge the card. The convenience of using physical cards will be improved and the payment process will be simplified.

In the long run, this move by Alipay may improve the infrastructure for the development of digital RMB.

On April 18, at the Digital Currency Forum of the Boao Forum for Asia, Li Bo, the current deputy governor of the central bank, said that the promotion of the digital RMB will be divided into three steps: ① Expand the scope of the pilot ② Build digital RMB infrastructure and ecosystem ③ Finally, build the corresponding legal and regulatory framework.

Regarding the first step, the pilot implementation of the digital RMB is in a stable expansion. Since last year, the digital RMB pilot has been launched in many places across the country. According to the previous announcement of the Digital Research Institute of the Central Bank, the first batch of digital RMB pilot areas are "four places and one scene", including Xiongan, Suzhou, Shenzhen, Chengdu and other cities and the future Winter Olympics scene; the second batch of digital RMB pilot cities include 6 cities, including Changsha, Shanghai, Hainan, Qingdao, Dalian and Xi'an.

As for the second step of promoting the digital RMB, the industry's focus may be on the more widely used form of "payment cards".

At present, digital RMB can be divided into two categories in terms of form: "hardware wallet" and "APP wallet". Of the two forms, hardware wallets obviously have a higher degree of attention: previously exposed physical media such as visual cards, fingerprint cards and even wearable devices all belong to this category.

Compared with most third-party payment accounts, the digital RMB APP wallet is no different, and its "dual offline payment" using SIM card and NFC technology is strictly speaking still completed by hardware technology.

Since the beginning of the year, hardware wallets have become an eye-catching protagonist in the digital RMB pilot activities, and their forms are showing an increasingly diverse trend: in traditional card forms, they include Postal Savings Bank visual cards, fingerprint cards and Industrial and Commercial Bank of China visual cards; in non-traditional forms, they include the "copper coin" wallet of the Xiongan Branch of the Agricultural Bank of China, wearable devices such as ski gloves and smart watches launched by the Bank of China, and power banks and elderly crutches launched by the Industrial and Commercial Bank of China.

- Wearable Smart Hardware Wallet -

Although they come in various forms, hardware wallets are still a type of “payment card” at the end of the day.

The development of traditional financial cards began with bank cards. During the transformation of financial technology, major banks have launched smart card products such as visual cards and Bluetooth cards. According to media reports, a visual card cost hundreds of yuan at the time, and its linked account was only a single bank's "electronic cash" that was manually recharged. The high cost and limited practicality eventually led to the stagnation of smart card development, which began to transform to online digitalization and evolved into digital bank cards.

Industry insiders pointed out that the current popularity of digital RMB may re-ignite the development trend of hardware wallets such as smart cards. Unlike APP wallets that require mobile phones with NFC functions to be "dual offline", digital RMB hardware wallets are closer to the use scenarios of paper money and have greater promotion advantages.

Back to Alipay's patent, the "payment card recharge-free" solution may contribute to the problem of smart card recharge. On the other hand, after linking the payment account, the loss of the hardware wallet can be solved by software unbinding, etc., and concerns such as "not daring to recharge too much and the card is easy to lose" will gradually decrease.

At the end of October last year, Huawei Consumer Business CEO Richard Yu announced the launch of Huawei Mate40, calling it the world's first mobile phone that supports the digital RMB hardware wallet, and said Huawei will be an important participant in the digital RMB. Compared with Huawei, which has already made arrangements in the field of digital RMB, Alipay seems to be slow to act, with little related news leaked.

It is worth noting that if "hardware wallet linked to payment account" becomes the mainstream application of digital RMB, Huawei's advantage gained by developing mobile phones that support digital RMB will be threatened. The first step of expanding the scope of the digital RMB pilot is continuing to advance. Alipay's launch of this patent is more like a move to "cut off the firewood from the bottom of the pot" in the hope of catching up from behind.

Alipay's move in the field of digital RMB remains to be seen. Even if the patent can be used, the cost of smart cards is still a problem. In other words, if the hardware wallet using this technology is still expensive, then the significance of this patent to Alipay's layout of digital RMB will be out of the question.