Indian banks and retailers have reportedly begun accepting contactless payments made with digital rupees.
The move is part of the Reserve Bank of India’s retail central bank digital currency (CBDC) pilot project, TechCrunch reported.
Reliance Retail is the first merchant to take part in the pilot, the report said, letting test groups of customers make QR code payments with the digital rupee at its Freshpik gourmet food stores with support from Indian banks ICICI and Kotak Mahindra.
“With more Indians willing to transact digitally, this initiative will help us provide yet another efficient and secure alternative payment method to customers at our stores,” Reliance Retail Director V Subramaniam said in a statement.
India began testing wholesale and retail versions of its CBDC last year, with the wholesale version receiving less-than-enthusiastic reviews from the country’s bankers, who said they had actually seen a downside to the program.
Each trade, the bankers said, needed to be settled individually, while trades using the existing interbank payment system could be handled in bulk.
“There is no advantage over internet-based transactions, and the lack of netting is actually a big drawback,” an executive at a private bank that took part in the pilot told Reuters in December.
December also saw reports from China — which has been working on its digital currency project for years — that consumers in that country have expressed little enthusiasm for CBDCs.
Xie Ping, a former official at China’s central bank, said at a conference that he was disappointed with the results of the digital yuan pilot and called for the program to be expanded.
“The cumulative circulation of the digital yuan in the two years of the trial has been only 100 billion yuan ($14 billion),” Xie said. That number, he added, indicated that “usage has been low, highly inactive.”
PYMNTS looked at the future of CBDC payments last month in a conversation with Shaunt Sarkissian, group chief markets officer at The Bank of London.
The interview dealt with the Universal Digital Payments Network (UDPN), which is designed to translate real-time payment speed and minimal processing fees to international financial transactions that could one day use CBDCs.
“You want to take this with a pretty healthy grain of salt,” Sarkissian told PYMNTS’ Karen Webster about the UDPN. “It’s very nascent, and it’s conceptual. And I think something like this will stay conceptual.”