Contactless: Partnership between China Mobile and CUP

• The major mobile carrier China Mobile (667 million subscribers) and the Chinese domestic card scheme China UnionPay have partnered to work on the development of m-payment products and services. Their contract plans a SIM-centric solution to enable online payments, bill payments, m-payments and POS NFC payments through Quick Pass (CUP’s dedicated app).

• In addition to joint promotional efforts, they are also planning to work on drafting standards, as well as on the development of a TSM and on phasing in a number of NFC pilot tests (in several Chinese towns).

Source: NFC World

• China UnionPay explains having rolled out over 620,000 contactless terminals to favour the adoption of Quick Pass –the acceptance of which carries on improving considering its leading position on the Chinese market and the impossibility for Visa payWave and MasterCard PayPass to challenge them on their grounds.

• Both CUP and China Mobile had already been focusing on their own m-payment solutions. China Mobile even aimed at developing its own system based on a proprietary contactless technology, RF-SIM, but this project was terminated end 2011

• Last August, CUP started deploying contactless payment services relying on microSD chips to counter mobile operators (see October 2011 Insight). This partnership with China Mobile does not seem to have an impact on this rollout conducted with the help of the Chinese bank China Construction Bank. UnionPay had also associated with China Telecom (SIM-centric and microSD-based model) and with China Unicom (SIM-centric).

• Mobile phones sales in China now outrun US sales, and the Chinese market could, according to a recent report rapport by (market specialist) Kapronasia reach 80 billion dollars by 2015 (compared to 7.6 billion end 2011) for 441 million users (vs. 218 million end 2011). These figures also account for all players’ mobilisation however standards are still being drafted and regulators still pondering over the sector.