Chinese Internet Payments Provider Alipay Taps NFC Phones to Offer Transit Ticketing

Chinese Internet payments heavyweight Alipay is launching a service enabling riders to tap to pay for bus and metro fares with NFC-enabled smartphones.

The service has reportedly launched in Shanghai and more than 30 mostly second-tier Chinese cities, though an official launch is planned for next month. Alipay will issue a virtual transit card for its popular Alipay Wallet with an application on one or more models of Chinese smartphone maker OPPO. The Internet payments provider, which is connected with Chinese e-commerce giant Alibaba, plans to expand the number of cities and NFC models, Alipay reportedly said Wednesday.

Reports say the Metro City Pass service will be stored on embedded chips in the OPPO phones and Alipay is reportedly talking to other device makers, such as Samsung Electronics and HTC. The use of embedded chips, however, has not been confirmed. 

While Alipay has had limited success so far in expanding its Internet payments service to the physical point of sale, a successful move to transit ticketing would represent a threat to the NFC business plans of China’s three major mobile operators–especially if Alipay were to use embedded chips or other alternatives to NFC SIMs. 

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Among Topics Covered:

  • Alipay’s move into NFC-enabled transit ticketing in 35 Chinese cities
  • Potential threat to the NFC business plans of Chinese mobile operators
  • Possible use of embedded chips for Alipay Metro City Pass application
  • Alipay’s past attempt to expand its Internet payments business to the bricks-and-mortar world with QR codes
  • Alipay comparison with PayPal
  • Government standard for transit cards and terminals that could help make Alipay transit-ticketing service interoperable across many cities
  • NFC technology in OPPO smartphones 

Among companies and organizations mentioned:

  • Alipay
  • Alibaba Group
  • OPPO Electronics
  • China Mobile
  • China Telecom
  • China Ministry of Housing and Urban-Rural Development
  • NXP Semiconductors 
  • PayPal

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