CHINA UNIONPAY: Testing NFC in three of its six trials

Bank card association China UnionPay has expanded its NFC and mobile payments project to a total of six provinces and cities.

China UnionPay is testing SIM-based mobile payments in all six of the test areas — the provinces of Shandong, Hunan and Sichuan and the cities of Shanghai, Ningbo, and Shenzhen. Functions available include mobile credit card bill payments, top-ups, utility bill payment, online shopping and both hotel and air ticket reservations.

NFC is being piloted in three of the test areas — Shanghai, Ningbo and Changsha:

• In Shanghai, nearly 6,000 merchant terminals have now been equipped to support NFC-based contactless payments and the full range of remote mobile payments are also on offer.
• In Ningbo, consumers can use their mobile phone to shop at more than 7,000 merchants across the city and to pay for travel on ten bus lines within the city.
• In Changsha, Hunan Province, the first phase of contactless payments terminal installations has now been completed in a range of department stores, supermarkets, cinemas, drug stores, convenience stores, food outlets and taxis.

"In order to comprehensively accelerate the development of mobile payment, China UnionPay is collaborating with various parties concerned to vigorously promote the transformation of POS terminals at CUP card merchants to support contactless payment business," says the association. "At present, China's largest merchant cluster for on-site mobile payment has taken shape within bankcard industry, while the number of merchants by the end of 2010 is expected to be 100,000, covering various fields like department stores, supermarkets, hotels, F&B and entertainment, electronic digital products, etc."

The project "will be further expanded in 2010, allowing hundreds of millions of cardholders nationwide to enjoy more convenient, efficient and secure payment service via mobile phone," says China UnionPay.

China UnionPay has been working on mobile payments in collaboration with nearly twenty banks — including Industrial and Commercial Bank of China, Bank of China, Bank of Communications, Postal Savings Bank, CITIC Bank, China Minsheng Bank and China Everbright Bank — since 2008. China UnionPay is also a strategic partner of mobile network operator China Unicom, which is to launch a commercial NFC service during the second quarter of 2010.

A key advantage of its solution, says China UnionPay, is the security and reliability of its technology. "Based on the financial security standards, the most advanced and most secure encryption technology worldwide is adopted for transmission of transaction information for CUP mobile payment," it explains — a key differentiator to the proprietary RF SIM technology China Mobile offers. "If the mobile phone gets lost, you only need to appropriately protect your transaction password and report the loss on a timely basis to guarantee security of personal bank account."

This article was first published at www.NearFieldCommunicationsWorld.com.

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• China Mobile will continue to ‘vigorously promote’ RF SIM
• The NFC Report: Is China heading towards the adoption of NFC?
• China Mobile begins commercial rollout of mobile contactless payments system

PARTNERS: China Unicom is building an open NFC business model (Click to enlarge)

The gloves are officially off in the fight to win control of the market for NFC services in China. Just a week after it was confirmed that China Mobile has commercially launched its RF SIM-based service, China Unicom has announced it is moving from the trial stage to a commercial launch of its own, NFC standard, service.

The pilot in Shanghai is not a trial any more, says China Unicom, it is "a real service offering to customers."

China Unicom, the country's second largest mobile operator, launched a mobile transport ticketing service in Shanghai in September 2009 and signed a deal with Chinese bank card association China UnionPay (CUP) in December. The deal was described as "a comprehensive strategic cooperation agreement" and is designed to lead to the introduction of a series of co-branded mobile payments services.

Now, says China Unicom, the plan is to:

• Launch payment services with financial institutions in Q2 2010 (estimated) using the SWP standard
• Establish a working group to support handset vendors' development of NFC phones in order to address the shortage of NFC phones (China Unicom has been using Single Wire Protocol compliant NFC handsets from Hedy during the trial phase of the project.)

We have had very good feedback from the market, says China Unicom and "the first slot of hundreds of NFC phones sold out within three hours in the first day." There has also been very strong support from banks, associations and the central bank for China Unicom's open business model, the operator adds.

China Unicom has signed up an impressive list of partners for the rollout, including:

• Bank card association China UnionPay
• Five banks — Bank of Communications, ICBC, China Merchants Bank, Bank of China, China Everbright Bank
• Five transport operators
• Three POS partners
• Four NFC chipset suppliers, including NXP, Inside Contactless and STMicroelectronics plus Chinese supplier FM.
• Six SIM suppliers — Gemalto, Giesecke & Devrient and Oberthur, plus three local suppliers.

This article was first published at www.NearFieldCommunicationsWorld.com.

Related news:

• China Unicom and Bank of Communications announce commercial NFC payments launch
• China Unicom signs up second banking partner
• China Unicom in bid to make Chongqing a $7bn world leader for NFC manufacturing and innovation
• China Unicom launches NFC payments service in Beijing
• China Mobile will continue to ‘vigorously promote’ RF SIM