Chinese NFC Takes another Step Forward with ZTE, China UnionPay Pact (Jan. 7, 2013)
Jan. 7, 2013
Telecom network and equipment provider ZTE Corp. has been selected by Shanghai-based card network China UnionPay (CUP) to provide mobile payment services to CUP cardholders. As part of the deal, ZTE—the world’s fifth-largest maker of telecom equipment—plans to develop an NFC-based mobile phone. The firms also said they would explore the development of payment systems through Internet Protocol television (IPTV).
While mobile payments have become popular in China in recent years, the vast majority of the growth has been in the remote/online shopping arena, rather than in-store retail, says Terry Xie, director of the international advisory service for Mercator Advisory Group. It wasn’t until last year, when CUP’s NFC payment standard was endorsed by the Chinese government and central bank, that in-store mobile was prepped to take off. “Currently the banking and mobile industry are working to launch NFC mobile payments, likely in the second half of this year,” Xie tells Paybefore, adding that groundwork already has been done on the NFC acceptance side. “CUP has been deploying contactless POS terminals over the past two to three years and has a large installation base in major cities like Shanghai and Shenzen,” he notes.
The ZTE partnership essentially will ensure that ZTE can develop handsets compatible with CUP’s NFC standards, Xie says. “And the involvement of ZTE, who made between 25 and 30 million smartphones in 2012, will help bring down the average costs of NFC handsets in China, lowering the barriers for consumer adoption.”