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JD Applies DC/EP to Employee Payroll Payment Amidst Rumour of e-Wallet Agenda

JD Technology, the operator of the major e-commerce platform that has been working with the  People’s Bank of China (PBoC) in the trial phases of the digital yuan, has announced expanding Digital Currency/Electronic Payment (DC/EP) application to payroll payment to some of its employees.

China is known as the first major economy at the forefront of issuing a central bank digital currency. (CBDC). Its leading role has made the Asian giant reach a trial phase for the digital yuan across major Chinese cities so as to monitor its effectiveness in preparation for a public roll out which is speculated to be during next year’s Winter Olympics in Beijing. has been pivotal in the trial process, accepting the digital currency as payment for some products on its online mall as the PBoC and partner city councils dole out red packets to citizens at random. 

Though China’s second-biggest online retailer after Alibaba, is the first virtual platform to accept the CBDC. The company disclosed at the fourth Digital China Summit held in Fuzhou earlier this week while participating in a DC/EP achievements show that it’s been test running the CBDC solution for payroll payment for some of its employees in Shanghai, Shenzhen, Chengdu, Changsha and Xi’an since January.

Employees were able to transfer the digital yuan to their regular personal bank accounts, or use it directly to make purchases via selected offline stores or JD’s online platform, the company notes in a public statement. It adds that the programme, a joint effort between JD Technology and the Industrial and Commercial Bank of China (ICBC), proves to improve  efficiency for the payment process, especially when there is a need to pay multiple entities or transferring to other banks.

JD’s disclosure comes as Reuters reports that six big state banks have been promoting the digital yuan use as well as the need for merchant and retail clients to download digital wallets to make direct transactions with the CBDC during another pilot programme slated for May 5 while bypassing popular  mobile payment service provided by Alipay and WeChat Pay.

According to the report, the idea is to wean consumers off their dependence on the two major service providers which control up to 94% of China’s payment market as at Q1 2020 going by a report by China-based data provider iResearch. 

JD pushing itself as an e-wallet service provider gets accepted for users across various marketplaces could see it eat into Alipay and WeChat Pay’s market shares considering its fintech unit, JD Digits, is reportedly planning to acquire a second payments license to be able to provide more digital financial services. 

Given China’s “sprint to becoming a cashless society” Citigroup notes in their  recent Future of Money: CBDCs, Crypto and 21st Century Cash report that they expect – considering that China is currently well ahead of major peers in developing a CBDC – a fast adoption of DC/EP over the next five years relative to other CBDCs. 

“Just as China invented paper money, the digital money revolution appears to be most evident there…And it is no surprise that, among large countries, the Chinese are furthest ahead on CBDCs,” the bank notes adding that the mobile phone revolution, the boom in e-commerce and a growing middle class over the past decade has led to a proliferation of innovations in China including digital wallets now dominating payments.


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