MOBILE HITS PAY DIRT

Cellphone-based third-party payment market gets crowded, goes mainstream after the authorities officially approved such mobile payment systems,” said Liu Fei, a retail sector researcher with Shanghai Mingshan Consulting.

Before launching its QR code-based payments, UnionPay promoted its near field communication or NFC payments that enable customers to pay by merely tapping their smartphones. The embedded SIM card in the phone would forge a payment agreement with the point-of-sale without having to key in the PIN or sign on the bill.

The contactless NFC mode has been widely accepted by merchants where frequent, low-value payments are the order of the day — restaurants, convenience stores, bus stations and subway train stations.

But industry observers said Chinese consumers seem to favor QR code-based payment services, particularly those offered by Alipay and WeChat.

According to Analysys data, Hangzhou-headquartered Alipay has nearly 54 percent market share in the third-party mobile payment market. Shenzhen-based WeChat Pay has almost 40 percent.

But the idea that only 6 percent market share is up for grabs doesn’t wash with other pay tools.

UnionPay is eyeing overseas markets as it has agreements with several merchants and ATM operators abroad, said a source who has close knowledge of its mobile payment strategy.

The source said: “NFC payment is UnionPay’s blockbuster product and is widely accepted in overseas markets, particularly in Asian destinations with the fastest growth of Chinese tourists. Now, UnionPay has also launched promotions for QR code-based solutions in developed markets such as Europe and the US.

“The rationale is that UnionPay has more exposure abroad than other domestic payment service brands. Chinese tourists will get attracted to UnionPay as they are familiar with the brand. Hopefully, that will deepen customer loyalty. When such tourists return to China, they will likely continue using UnionPay products. Thus, we will win more market share.”

So, UnionPay International, the overseas business arm of the bank card association, has signed a cooperation agreement with France’s Office de Tourisme DLVA for payments at the Coeur de Provence tourism project that targets Chinese tourists.

The two sides will encourage local merchants to accept UnionPay cards. In the future, tourists will be able to use UnionPay cards conveniently in France.

Cai Jianbo, CEO of UnionPay International, said the company is seeking to “serve cardholders globally” and “grow together with partners globally”.