Has China Mobile found the business model for mobile contactless and NFC?

OPINION: One of the key forecasts in our new report ‘NFC: The Road to Commercial Deployment’ is that successful NFC services will require one company to firmly take the lead, and that this will inevitably see banks and mobile network operators going head-to-head in a battle to win control of consumers’ mobile wallets.

The news this week that China Mobile has begun a major commercial deployment of mobile contactless payments looks set to confirm our prediction, with a twist. China Mobile has opted to go it alone with its deployment, without any involvement from the Chinese banks and, more, has chosen to use proprietary non-NFC standard RF SIM technology for its new service.

But Chinese bank card association China UnionPay is unlikely to simply sit on the sidelines and watch while China Mobile builds a major new payments business. It recently signed a strategic cooperation agreement with China Unicom, the country’s second largest mobile operator, that will see the two developing a series of co-branded mobile payments services. These are expected to be based on NFC technology and, therefore, would be incompatible with China Mobile’s RF SIMs.

Will China provide a blueprint for how to get NFC and mobile contactless services off the ground in other countries, too? Either way, the country’s banks, operators, retailers and transport providers are going to be ones to very closely watch in the year ahead…

Sarah Clark, Editor

P.S. Not got a copy of ‘NFC: The Road to Commercial Deployment’ yet? Find out more and order your copy here.