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China Mobile may offer combined NFC and RF SIM services

China Mobile is considering adding support for NFC, as well as for its own RF SIM technology, to its mobile payments service, the company has told reporters.

Beijing-based Marbridge Consulting reports that:

An industry source who wished to remain anonymous said that while China Mobile’s proposed 2.4GHz standard is more advanced than the traditional NFC standard, it has encountered difficulties due to the lack of a mature industry chain. The 2.4GHz standard is based on RFID, whereas the majority of the POS terminals supplied by banks and other financial organizations use the 13.56MHz NFC standard, which is not compatible with RFID-SIM cards. Replacing these POS terminals would constitute an extremely large expense, while China Mobile’s adoption of NFC-based technology would allow compatibility with existing systems.

Rival mobile network operator China Unicom announced in February that it will launch a commercial NFC standard service by mid-2010 in conjunction with the Chinese banks. And Chinese bank card association China UnionPay confirmed its commitment to NFC last month with a major expansion of its NFC trials to three new regions.

However, China Mobile is still committed to RF SIM, Marbridge adds. As well as having the advantage of adding near field communication capabilities to any mobile phone, China Mobile also sees it as having major potential as a mobile advertising medium:

China Mobile has proposed two operational modes for its 2.4GHz: a short-range mode that would require the phone to be swiped across the reader, and a medium to long-range mode that could transmit in excess of 20 meters. The latter will be a major source of advertising income for China Mobile, as vendors with a broadcasting terminal will be able to send real-time advertisements to pedestrians passing within 20-30 meters of their shops. China Mobile has therefore not scrapped its plans for the 2.4GHz standard, but is instead setting its strategic sights on a combination of the two.

  • Jason

    It might be a good solution to creat their own business models for mobile ad. services. It is sort of differentiation as compared to Google’s or Apple’s ad strategy. It is meaningful to keep an close eye on China Mobile’s move. I hope that using the long-range mode become successful.

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