DBS Launches E-CNY Merchant Collection Solution for Mainland Businesses to Receive CBDC Payments, Completes First Client Transaction

DBS announced it is one of the first foreign banks in China to launch an e-CNY merchant collection solution and complete an e-CNY transaction for a client.

The solution empowers corporate clients of DBS China to collect payments from their customers in e-CNY, China’s central bank digital currency (CBDC), and enjoy the automated settlement of e-CNY direct into their CNY bank deposit account. This solution brings several benefits, including:

• Providing businesses a seamless and efficient method to collect a new form of digital money without having to go through manual settlement processes;
• Leveraging e-CNY’s unique capabilities for businesses to receive payments digitally in underserved regions with limited internet connectivity; and
• Enabling seamless reconciliation by providing consolidated merchant reports with itemised e-CNY transactions, with the report accessible via DBS IDEAL, the bank’s digital platform for business banking.

Ginger Cheng, Chief Executive Officer of DBS Bank (China), said: “We received strong interest from several clients for the solution since its launch, and we are pleased to have completed the first e-CNY collection for a client – a catering company in Shenzhen. By seamlessly integrating a CBDC collection and settlement method into our clients’ existing payment systems, this will help position their business for a digital future where consumers in China use e-CNY for their daily activities. This showcases our dual commitment of making banking joyful for our clients while actively supporting the development of China’s financial market innovation.”

Lim Soon Chong, Group Head of Global Transaction Services, DBS Bank, said: “The e-CNY merchant collection solution strengthens DBS’ position as an innovator in digital payment solutions, and marks yet another milestone in our vision of enabling instant and frictionless 24/7 payments for our customers. We look forward to building on this launch to explore new digital payment solutions, such as cross-border CBDC payments.”

e-CNY usage in China has grown steadily since its pilot launch in April 2020. As of December 2022, there were over 13.6 billion e-CNY in circulation^[1]. The CBDC is currently accepted across 26 cities and 17 provinces in China^[1], with adoption expected to grow further as the programme gradually expands to more regions.

Corporate clients of DBS China can reach out to their relationship managers to quickly adopt the e-CNY merchant collection solution. They can enjoy a one-stop onboarding service with point-of-sales upgrades and staff training jointly conducted by DBS and UnionPay Merchant Services, DBS’ partner that enables this solution.

Constant innovations in digital payments and digital currency solutions

DBS has been consistently experimenting and leveraging the power of emerging technologies to create a more efficient and safer payments landscape, aimed at transforming the future of payments.

In 2021, DBS co-founded Partior, an independent company transforming cross-border payments and global interbank value movement.

The bank has also participated in experiments with like-minded industry players, such as Project Orchid – led by the Monetary Authority of Singapore (MAS) to develop infrastructure for the issuance of a programmable digital Singapore dollar. As part of this exercise in 2022, DBS launched a live pilot to issue purpose-bound money-based vouchers against tokenised Singapore dollars.

DBS also participated in the MAS-led Project Guardian to explore the settlement of foreign exchange and government securities transactions using permissioned decentralised finance protocols.

The bank was also part of Project Ubin, an industry initiative by MAS to explore the application of blockchain technology involving multi-currency payments and settlements. Project Ubin was the launch pad for the development of Partior.

^[1] Ministry of Commerce, People’s Republic of China: http://tradeinservices.mofcom.gov.cn/article/news/gnxw/202306/149254.html

Source: DBS