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Visa had a monopoly on payments at the Olympics for 36 years. China put an end to that

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Since 1986, Visa has served as the exclusive payment service provider for the Olympic Games, complimenting cash as one of the only two ways to pay for anything at official Olympic venues. If 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, Visa is the only way to go.

That was until Beijing 2022.

Inside the “Olympic bubble”—a dynamic quarantine zone China operates throughout the Olympic Village in Beijing—athletes, media, staff, and all other guests have three payment options available, rather than the usual two. Visa, cash, or China’s digital currency, the e-CNY.

“The Olympics has always been scheduled by the People’s Bank of China as the global coming out party for the digital yuan,” says Richard Turrin, author of Cashless: China’s Digital Currency Revolution.

China began rolling out its digital currency in pilot zones in April 2020. According to officials, over 140 million users have registered for e-CNY accounts, which they can access through a smartphone app. As of November last year, the digital currency processed $9.7 billion worth of transactions.

But to the average end user in Beijing’s Olympic bubble, China’s e-CNY payments system operates the same way as a pre-payment card. Guests at the Olympic Village use cash to top-up an e-CNY card, which they can then use for contactless payments at any point of sale in the Olympic Village.

Although utilizing a card interface blurs the distinction between paying in e-CNY or paying with a Visa credit card, using China’s digital currency at the Olympics is cheaper than paying with Visa. The latter will charge a processing fee on an international payment, as would be the case for a U.S. athlete using their U.S. credit card to buy something in Beijing. There are no fees for using e-CNY in China.

According to the Wall Street Journal, citing an unnamed source, e-CNY payments outnumbered Visa payments inside Beijing’s main Bird’s Nest stadium during the opening ceremony of the Beijing 2022 Winter Olympics last Friday. But Beijing hasn’t released any data on the uptake of e-CNY inside the Olympic bubble, yet.

Visa extended its exclusive license with the International Olympic Committee (IOC) in 2018, paying an undisclosed sum to maintain its Olympic privileges through to 2032. Other brands, like Coca-Cola, are known to have paid the IOC $100 million fees for exclusive, multi-year sponsorship rights.

Visa has remained silent about the digital yuan encroaching on its Olympic turf. Visa didn’t respond to request for comment on this article.

Chinese media have reported that using the e-CNY as a payment system at the Beijing Winter Olympics is not a violation of Visa’s exclusive deal, because the e-CNY is just a digital-native version of China’s fiat currency. However, the official Olympics website lists Visa as having exclusive rights to “pre-paid cards” as well as payment services.

The IOC didn’t respond to request for comment on whether Visa was consulted before the e-CNY was approved as a payment service at Beijing 2022.

In some way, Beijing might have actually made a concession to Visa by allowing the U.S. payments provider to operate in China for the Olympics at all. Until 2018, Beijing refused all foreign payment service providers the right to operate in China, handing China’s domestic UnionPay service a monopoly on domestic renminbi transactions.

In 2018, five years after the U.S. complained to the World Trade Organization about China’s exclusionary practices, Beijing granted American Express an operating license. In 2020, Beijing granted Mastercard a license to operate a bank card clearing business in China, too. Visa, despite applying for a license in 2017, remains an unapproved outlier.

Visa may still be hoping that Beijing will grant it a license to clear renminbi payments in the country, opening access to China’s roughly $16.5 trillion of annual card payments. Having no license means Visa can’t earn money from merchant fees in China, like it does in the U.S, because it isn’t providing a payments service. Travelers can still use Visa credit and debit cards in China, but the U.S. payments service piggybacks on the UnionPay network to process Visa card payments made in the country.

But even if Visa is allowed into China, it will have arrived decades too late. The Chinese payments space is already dominated by mobile wallet providers Alipay and WeChat Pay, and many analysts see Beijing’s launch of a digital currency as the government’s bid to wrest control of the payments space from those private tech players.

At least in the Olympic Village, Visa doesn’t have to compete with Alipay and WeChat Pay because neither are allowed. So, with only three payment options available, Visa should be happy with taking silver at the Winter Olympics, if the e-CNY takes gold.

This story was originally featured on Fortune.com

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