The country's third largest mobile network operator is testing non-NFC standard RF SIM technology in Shanghai, where China Unicom is already running an NFC trial.
China Telecom has become the second of China's three mobile network operators to take an interest in RF SIM technology.
The operator has begun a trial in Shanghai in conjunction with RF SIM supplier Seimma Tech Co. Two hundred points of sale will be equipped to accept RF SIM payments for the trial and 1,000 subscribers will participate.
The move follows the news this week that China Mobile has begun a commercial rollout of RF SIM technology in Beijing.
China Unicom, which recently signed a strategic cooperation agreement with bank card association China UnionPay (CUP) to develop a range of co-branded mobile payments services, is also conducting a test in Shanghai, this time using standard NFC technology.
If the China Telecom trial proves successful, new RF SIM-based projects will be rolled out in places such as supermarkets and restaurants all over the country, Seimma's marketing director Ding Peihua has told the Global Times:
Seimma plans to launch projects with China Mobile in Jiangsu Province in the near future, and with China Unicom in Zhejiang Province, he said.
In the short term, such projects will mainly cover the southern part of the country, Ding said.
There is little to worry about in terms of the application of the technology, Ding believes, adding that the safety of mobile payments is not a concern.
Handset to POS near field communication (NFC) is only usable for small payments of less than 1,000 yuan ($146.44) Ding said.
Users can set up a password for payments above a certain amount, and if they lose their phones, they can report them to telecom carriers, which will immediately send signals over the air to put the phones out of service, he said.
In addition to the NFC model, online banking will make large payments possible.
• Thanks to Lionel Brahami of Beijing-based NFC specialists Famoco for the tip-off.