China UnionPay to Launch NFC Mobile-Payment with HTC Android Phone

Aug 12 2011

Chinese bank card network China UnionPay has announced plans to introduce a mobile-payment service using an NFC-enabled Android phone from Taiwan-based handset maker HTC.

The phone, reported by Taiwan’s Central News Agency as the HTC Stunning, will enable users to do contactless payments, along with mobile banking and bill payment.

A report in the China-based English-language publication China Daily said the phone could hit the market by September, though that could not be confirmed. It was unclear which banks would participate and if any mobile operators would be part of the project.

“Mobile phone users no longer have to bring their bank cards in the future because their smartphones can provide the same function," Chai Hongfeng, executive vice-president of China UnionPay, reportedly said at a news conference in Shanghai yesterday.

He reportedly said that UnionPay plans to begin to deploy mobile payment and related services in about a dozen Chinese cities with local banks. It would use UnionPay’s contactless payment application.

Update: China UnionPay has been drafting specifications to put its payment application on microSD cards in NFC phones, and the new HTC handset might support this, with an antenna built into the handset, not the microSD card. The NFC chip in the handset would be connected to the microSD card slot via some type of single-wire-protocol-like connection. End update.

In a meeting held by UnionPay last April, and attended by representatives of HTC and mobile operators, among other mobile-commerce players in China, HTC discussed plans for an NFC phone supporting the single-wire protocol, or SWP, which could store applications on SIM cards. It’s not clear if the new HTC NFC phone announced in China yesterday is the same one discussed earlier this year.

HTC in January said it invested US$5.5 million in mobile-financial services provider Shanghai F-road Commerce Service, and F-road Commerce will reportedly work on the project with HTC and China UnionPay. 

“HTC believes that mobile payments will become an indispensable function for smartphones, and we expect to jointly establish a complete industry chain of mobile payments based on such strategic alliances," Fred Liu, president of HTC engineering and operations, said in the statement, Taiwan’s Central News Agency reported.

Update: The news agency in a follow-up report, said that Steve Wang, associate vice president of HTC’s mobile application and software design, reportedly called for a uniform mobile-payment system among Taiwanese banks, urged the government to kick-start the process and said interest seems to have waned among Taiwanese mobile operators in NFC.

But, in fact, Taiwanese telcos have met to possibly form a consortium to help them roll out NFC services, NFC Times has reported. Among payment companies interested are fare-collection and retail-payment provider EasyCard Corp., which would compete with banks. Banks would likely use MasterCard PayPass or Visa payWave as a mobile-payment application. One or more of the Taiwanese telcos, including Chunghwa Telecom, the largest operator, may launch NFC services before the end of the year. End update.

UnionPay last year also formed a Mobile Payment Alliance that included 18 national and local banks. The payment network, which has a monopoly on domestic bank-card transactions, also announced last year it would step up the rollout of contactless point-of-sale terminals, especially in Shanghai. UnionPay had a deal with No. 2 mobile operator China Unicom to launch an NFC project last year with banks, the Bank of China and Bank of Communications

China Mobile, the country’s largest mobile operator, is also gearing up for NFC-based mobile payments, having abandoned plans for its nonstandard RF-SIM technology. Last year the telco bought a 20% stake in Shanghai Pudong Development Bank. NFC Times has learned that China Mobile is considering buying NFC phones with embedded secure elements.

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