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China UnionPay begins major expansion of NFC project

The bank card association is conducting NFC pilots in Shanghai, Ningbo and Changsha and has extended its mobile payments services to a total of six provinces and regions.

CHINA UNIONPAY: Testing NFC in three of its six trials

Bank card association China UnionPay has expanded its NFC and mobile payments project to a total of six provinces and cities.

China UnionPay is testing SIM-based mobile payments in all six of the test areas — the provinces of Shandong, Hunan and Sichuan and the cities of Shanghai, Ningbo, and Shenzhen. Functions available include mobile credit card bill payments, top-ups, utility bill payment, online shopping and both hotel and air ticket reservations.

NFC is being piloted in three of the test areas — Shanghai, Ningbo and Changsha:

  • In Shanghai, nearly 6,000 merchant terminals have now been equipped to support NFC-based contactless payments and the full range of remote mobile payments are also on offer.
  • In Ningbo, consumers can use their mobile phone to shop at more than 7,000 merchants across the city and to pay for travel on ten bus lines within the city.
  • In Changsha, Hunan Province, the first phase of contactless payments terminal installations has now been completed in a range of department stores, supermarkets, cinemas, drug stores, convenience stores, food outlets and taxis.

“In order to comprehensively accelerate the development of mobile payment, China UnionPay is collaborating with various parties concerned to vigorously promote the transformation of POS terminals at CUP card merchants to support contactless payment business,” says the association. “At present, China’s largest merchant cluster for on-site mobile payment has taken shape within bankcard industry, while the number of merchants by the end of 2010 is expected to be 100,000, covering various fields like department stores, supermarkets, hotels, F&B and entertainment, electronic digital products, etc.”

The project “will be further expanded in 2010, allowing hundreds of millions of cardholders nationwide to enjoy more convenient, efficient and secure payment service via mobile phone,” says China UnionPay.

China UnionPay has been working on mobile payments in collaboration with nearly twenty banks — including Industrial and Commercial Bank of China, Bank of China, Bank of Communications, Postal Savings Bank, CITIC Bank, China Minsheng Bank and China Everbright Bank — since 2008. China UnionPay is also a strategic partner of mobile network operator China Unicom, which is to launch a commercial NFC service during the second quarter of 2010.

A key advantage of its solution, says China UnionPay, is the security and reliability of its technology. “Based on the financial security standards, the most advanced and most secure encryption technology worldwide is adopted for transmission of transaction information for CUP mobile payment,” it explains — a key differentiator to the proprietary RF SIM technology China Mobile offers. “If the mobile phone gets lost, you only need to appropriately protect your transaction password and report the loss on a timely basis to guarantee security of personal bank account.”

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