Being reliant on existing payment infrastructure, the contactless payment system is easy to implement and reaches out to even children/elderly customers
Over the past few years, central banks in many countries and regions have been testing Central Bank Digital Currencies (CBDCs) as an alternative electronic payment option.
However, merchants may be reluctant to accept such new payment tokens due to various systemic risks, and mass-market rollouts could have limited reach due to the numbers of people who do not use or own smartphones — such as children and the elderly, who could find the user interfaces and payment systems hugely challenging.
In response to this natural impediment, Japan’s only international payment brand, JCB Co., Ltd. (JCB) has launched a ‘JCB Digital Currency’ pilot project to test and develop an easy-to-use CBDC payment solution with Tokyo merchants to increase outreach.
JCB will have CBDC acceptance tested using existing its network of EMV-based contactless payment machines, merchants, POS terminals and plastic card-based user interfaces. According to the firm’s Board Member and Senior Executive Officer, Koremitsu Sannomiya, “this project proves that we can use existing payment acceptance hardware for new CBDC payment systems, which is a huge benefit for both consumers and merchants.”
The pilot project is supported by an identity tech firm as well as a fintech firm, who will continue development of the payment system through late 2022 and conduct trials until March 2023.
Said Romain Zanolo, Managing Director, APAC Financial Institutions, IDEMIA, the identity tech firm: “We believe that CBDCs are redefining the very fundamentals of the payment ecosystem. We’re proud that our ability to innovate has enabled CBDC payments with existing card and POS terminal hardware,” asserting that the joint payment system expertise “will usher in worldwide CBDC growth.”
Joel Tay, CEO, Soft Space Sdn Bhd, the fintech firm in the pilot, said: “Although CBDCs are still in their infancy, this pilot takes us forward from theory to reality, by harnessing our in-store payment experience and existing payment platform expertise.”