According to the bank-level data released by Chinese central bank-People’s Bank of China, Chinese mobile payment industry turnover boomed 317.56% year-over-year to 9.64 trillion Yuan ($1.59 trillion) in 2013. More specific, the number of orders hiked 212.86% year-on-year to 1.67 billion.
This incredible rise is rooted in the popularity of mobile devices especially smart phones in China. In fact, China Mobile, the biggest provider, alone has more than 750 million subscribers and recently forged new ties with Apple to provide the Republic with cheaper versions of the iPhone.
A separate report by online tracking and data analysis service iResearch suggests an even faster acceleration of mobile money services, with total transaction volume by Chinese independent mobile payment services reaching 1,219.74 billion Yuan (roughly $200 billion) in 2013, a 707 percent year-over-year increase.
These above statistics reveal a huge opportunity for mobile payment service providers in China and even all over the world because China is often considered as a large and fast growing market.
However, it is too soon to forecast anything especially in this new industry.
In fact, Chinese consumers are slow to adopt mobile payment services, at least in the short term. Analysts predict that strong user growth may not come for years. Beijing-based telecom consultancy Maverick China Research pointed out that 75 percent of mobile phone users in China don’t have access to mobile payments. Of the 25 percent that do have, less than 2 percent actually use it to execute transactions.
Another problem arise in mobile payment market of China is the conflict between bank and telecom operators, in particular, between China Mobile and China UnionPay, which may also thwart the development of mobile payments in China.
This problem also leads to another serious problem called domination. “In China, mobile payments are still in their infancy and most projects were initiated by different organizations – in some cases it is a telecom operator and in others it is a bank,” said T.K. Ng, general manager of Motorola networks services in the Asia-Pacific and China.
Apparently, Mobile payment app providers will find it much more difficult to exploit the China market. Some of them come up with a solution of becoming a partner of both titans, however, they encounter another obstacle since different telecom operators and banks are using various technology standards, which further inconveniences end users.
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