Since 1986, Visa has been the Olympic Games’ sole payment service provider, complementing cash as one of only two options for paying for anything at official Olympic venues. Visa is the only way to go whether you’re at the Olympics and need to pay with a credit card, or if you’re online and want to buy tickets for an upcoming Games.
That was till 2022 in Beijing.
Athletes, media, employees, and all other visitors have three payment choices inside the “Olympic bubble,” a dynamic quarantine zone China operates across the Olympic Village in Beijing, rather than the normal two. Visa, cash, or the e-CNY, China’s digital money.
According to Richard Turrin, author of Cashless: China’s Digital Currency Revolution, “the Olympics has always been slated by the People’s Bank of China as the global coming out party for the digital yuan.”
In April 2020, China began spreading out its digital currency in test zones. Officials claim that over 140 million people have signed up for e-CNY accounts, which they may access via a smartphone app. The digital currency has completed $9.7 billion in transactions as of November of last year.
However, the average end user in Beijing’s Olympic bubble perceives China’s e-CNY payment system as a pre-payment card. Guests at the Olympic Village top up their e-CNY cards with cash, which they may then use to make contactless payments at any point of sale in the village.
Although the distinction between paying in e-CNY and paying with a Visa credit card is blurred when using a card interface, using China’s digital currency at the Olympics is less expensive than paying with Visa. On an international payment, such as a U.S. athlete using their U.S. credit card to buy something in Beijing, the latter will impose a processing fee. In China, there are no charges for using e-CNY.
e-CNY payments surpassed Visa payments inside Beijing’s major Bird’s Nest stadium at the opening ceremony of the Beijing 2022 Winter Olympics on Friday, according to the Wall Street Journal, citing an unnamed source. However, Beijing has yet to share data on the use of e-CNY within the Olympic bubble.
Visa’s exclusive contract with the International Olympic Committee (IOC) was extended in 2018, for an undisclosed fee, to keep its Olympic privileges until 2032. Other companies, like as Coca-Cola, have reportedly paid the IOC $100 million for exclusive multi-year sponsorship rights.
The digital yuan has encroached on Visa’s Olympic turf, but the company has been silent. Visa did not react to this article’s request for comment.
The use of the e-CNY as a payment mechanism at the Beijing Winter Olympics is not a violation of Visa’s exclusive agreement, according to Chinese media, because the e-CNY is simply a digital-native form of China’s fiat currency. Visa, on the other hand, is listed as having exclusive rights to “prepaid cards” and payment services on the official Olympics website.
When asked if Visa was informed before the e-CNY was accepted as a payment provider at Beijing 2022, the IOC did not react.
By allowing Visa to function in China for the Olympics, Beijing may have made a compromise to the American payments company in some ways. Until 2018, Beijing denied all foreign payment service providers permission to operate in China, thereby giving China’s local UnionPay service a monopoly on yuan transactions.
Five years after the United States filed a complaint with the World Trade Organization about China’s discriminatory policies, Beijing awarded American Express a licence to operate. Mastercard was also awarded a licence to operate a bank card clearing company in China by Beijing in 2020. Despite having applied for a licence in 2017, Visa is still an unapproved outlier.
Visa may still be hoping for a licence to clear yuan payments in China, allowing them access to the country’s nearly $16.5 trillion in annual card payments. Due to its lack of a licence, Visa is unable to profit from merchant fees in China, as it does in the United States, because it is not providing a payment service. Visa credit and debit cards are still accepted in China, however the US payments service uses the UnionPay network to process Visa card payments made in the nation.
Even if Visa is permitted entry into China, it will be decades late. Mobile wallet companies Alipay and WeChat Pay already dominate the Chinese payments industry, and many observers regard Beijing’s creation of a digital currency as the government’s attempt to seize control of the payments space from those private tech giants.
Visa does not have to compete with Alipay or WeChat Pay in the Olympic Village because none is permitted. With only three payment choices, Visa should be content with a silver medal in the Winter Olympics if the e-CNY wins gold.
This article first appeared on Fortune.com.