For many years, people could only use either cash or Visa to pay for anything in the official Olympic games. It meant that if you wanted to buy something during the games or pay for tickets, you could only do it with Visa and cash.
Visa has dominated the world. It is a payment processor that people use to make purchases not just from credit cards but also debit cards. People also use Visa to fund online gaming in casinos like onnrainnkajino.
It was a monopoly that has been happening since 1968. China decided to end it in 2022. In the 2022 Olympics in Beijing, people had three options to pay—Visa, cash, and digital currency of China called e-CNY.
The e-CNY is not a new thing. It was rolled out in April 2020 in different pilot zones. Now, there are over 140 million users of the e-CNY, and the money is accessible via mobile apps. As of November 2021, the e-CNY transactions equal $9.7 billion.
It was the Winter Olympics that boosted the use of e-CNY. The People’s Bank of China used the Olympics as a coming-out party for the e-CNY. They used it as an opportunity to boost its use, not only from Chinese residents but also from tourists.
To any person in the Olympics, the e-CNY is like a prepaid card that has money in it. They had to buy an e-CNY card and then top it up. Then, they used it for contactless payments at POS stations and stores in the Olympic Village.
The card blurs the distinction between using a typical Visa debit or credit card and the e-CNY. To a user, it was difficult to understand why it was necessary. Despite this, paying with China’s e-CNY was cheaper than using Visa.
Why is this? It is because Visa charges a processing fee for international payments. If a person swipes the card multiple times, he also has to pay multiple processing fees. China did not charge any processing fee for using the e-CNY card.
During the 2022 Olympics, the e-CNY transactions outnumbered those of Visa inside the Birds Nest. It was Beijing’s main stadium for the opening ceremony. China, however, has not released any official statement about it.
Visa, on the other hand, extended its license to the International Olympic Committee or IOC back in 2018. The company paid an undisclosed amount. In exchange, it gets the same privileges until 2032. It is not only Visa that does this. Some companies like Coca-Cola paid $100 million for exclusive sponsorship rights.
It is possible that Beijing and Visa had an agreement, but this is only speculation. Until 2018, China did not allow foreign payment service providers in the country. The only company that did it was UnionPay, which pretty much monopolized payment processing services in the country.
Visa has no official statement about the e-CNY and how it is encroaching on Visa’s turf at the financial end of the Olympics. On the other hand, some say that the existence of the e-CNY is not a violation of the agreement between Visa and the IOC. The e-CNY is merely a digital version of the currency of China.
In 2018, the US complained to the World Trade Organization about the practices of China. Particularly, the US complained about its exclusionary practices. Beijing granted American Express and Mastercard the license to operate in China, but not Visa.
Visa applied for the privilege to operate in China but has not been approved. They have been applying since 2017.
Until today, Visa remains hopeful that China will approve its application. If this happens, Visa will have access to China’s 16.5 trillion in annual card payments. If Visa fails to secure this license, it cannot operate in China. People in China cannot use Visa to process financial transactions, and Visa is losing out on the fees they could earn.
Now, even if Visa manages to convince the Chinese government to grant them a license, they are already late to the party. China now has many ways to pay digitally. One such thing that dominates the online transaction market is Alipay and WeChat Pay.
Many analysts are in consensus that the e-CNY is the Chinese government’s answer to these private financial tech giants. In the Olympics, Visa does not have to compete against other payment processors. Even if China has e-CNY, it is not technically a payment processor but rather a digital form of the country’s currency.
While China is not a hermit country, it does have strict regulations on just about anything. Even Hollywood has to make adjustments to its films so as not to offend the sensibilities of the people. Google, for one, cannot penetrate the country.
Over time, Visa will surely find a way to offer its services in China. After all, Mastercard and American Express did it. For now, it can take consolation that it has a grip on the Olympics for the next decade—an event that will earn them millions for several years to come.