Mobile Payments in China: Emergence of a Mega-Market

by Hua Zhang, November 11, 2010

Abstract

China will soon be the largest mobile payments market in the world. China's mobile payments market is expected to soar 48% year on year to 410 million users by 2013.

In a new report, Mobile Payments in China: Emergence of a Mega-Market, Celent examines the market size, market characteristics, major supply chains, vendors, technology and customer experience of mobile financial services in mainland China.

The major players in China’s mobile payments market include mobile operators, banks, and third party payments companies. Mobile operators mainly focus on contactless mobile payments, and they have established their own payment networks in shops, stations, etc. Banks are licensed to handle large transactions and are able to provide complex financial products. They mainly focus on large payments, with SD cards bound with bank cards. Third party payment companies are more competitive in terms of product innovation and discounts.

Remote mobile payments and contactless mobile payments are two different business models with very different markets. More payment tools, such as bank cards, credit cards, and prepaid cards will be integrated into the mobile phone. A huge market will open if China UnionPay succeeds in linking the SD card to credit cards and bank cards.

"Partnerships with banks are very important for vendors who want to enter the market. Currently, the best business model in the Chinese market focuses on cooperation between operators and banks,” says Hua Zhang, analyst with Celent’s Asia Financial Services group and author of the report. “Mobile operators and third party payment companies are also strengthening their cooperation with the banking industry for increased success.”

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

3

History of Mobile Payments

5

Consumer and Market Trends

6

 

Remote Mobile Payments Market

9

 

Contactless Mobile Payments Market

12

 

Market Trends

13

Supply Chain

15

 

Various Key institutions

16

 

Mobile Operators

18

 

China UnionPay

23

 

Third Party Mobile Payments

24

 

Relevant Legislation

26

Contactless Mobile Payment Technology and Key Suppliers

28

 

Nationz Technologies Inc.

31

 

Eastcompeace

31

 

Hengbao

32

 

Changjiang Electronics Technology

32

 

Zhengtong Electronics

32

 

Newland

33

 

Hi Sun Technology

33

 

Talkweb Information

33

Development Paths for Mobile Payments

34

 

Factors Affecting the Market

34

 

Case Studies

35

Outlook

39

Leveraging Celent’s Expertise

41

 

Support for Financial Institutions

41

 

Support for Vendors

41

Related Celent Research

42

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