China Digital Byte series

Mobile payment in China’s digital age

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China Digital Byte series Extending well beyond payments Mobile payment in China's digital age Finally, the era of mobile payments? We may have finally reached the highly anticipated mobile payment (m-payment) revolution. With worldwide m-payment transactions projected to reach US$721 billion by 2017, it has already started to impact both the online and physical retail experience. Yet m-payment is not about replacing cash, and potentially it is not even about payment itself. Instead, it can unlock the key to much bigger revenuegenerating opportunities such as targeting behaviour for product sales resulting in refined loyalty programmes and better customer insights. According to PwC's recent mobile wallet survey report, more than 50% of respondents would like to get loyalty discounts and coupons instead of paper-based marketing materials at checkout when using a mobile wallet to pay. Yet, the evolution of m-payment has been slow, and in many cases driven by countries with consumers that lack a bank account rather than those countries with strong banking infrastructure and digitally-savvy customers. The reasons is clear: creating payments where there is little infrastructure is obvious; but changing the traditional card-based transaction payment ecosystem in mature markets to mobile (whether proximity- or cloudbased) requires a number of components across the retail banks, mobile operators, handset manufacturers, software (OS) and application developers, value-added service providers, and trusted service manager (TSM) platforms. The infancy of the m-payment industry in Mainland China In China, the m-payment industry is still at its embryonic stage. Remote payments are prevalent due to the popularity of online purchases through smartphones, largely driven by over 75% of internet access in China being made over a mobile device. The development of proximity payment is still at the trial stage with various commercial pilots in major cities headed by mobile operators, banks and China UnionPay.

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