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Global and China Mobile Payment Industry Report,
2019-2025
Published: June 2019
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Global and China Mobile Payment Industry Report, 2019-2025
Study Goal and Objectives
This report provides the industry executives with strategically significant competitor information, analysis,
insight and projection on the competitive pattern and key companies in the industry, crucial to the
development and implementation of effective business, marketing and R&D programs.
Report Objectives
To establish a comprehensive, factual, annually updated and cost-effective information base on market
size, capabilities, output, sales volume, import and export, competition patterns, market segments,
goals and strategies of the leading players in the market, reviews and forecasts.
To assist potential market entrants in evaluating prospective acquisition and joint venture candidates.
To complement the organizations’ internal competitor information gathering efforts with strategic
analysis, data interpretation and insight.
To suggest for concerned investors in line with the current development of this industry as well as the
development tendency.
To help company to succeed in a competitive market, and understand the size and growth rate of any
opportunity.
This report presents the ideal medium to understand the increasing opportunities in the field of this industry,
including their market and applications, and will help research institutes, manufacturers, distributors,
investors and other industry insiders to succeed in this growing industry.
Intended Audience
The report will be relevant to the following stakeholders:
Marketing managers to identify new market opportunities and develop targeted promotion plans for their
products;
Research and development professionals to stay on top of competitor initiatives and explore demand for
their products;
Business development executives to understand the dynamics of the market and identify possible new
markets;
Information and research center librarians to provide market researchers, brand and product managers
with the information needed to do their jobs more effectively.
Methodology
Both primary and secondary research methodologies were used in preparing this study.
Initially, a comprehensive and exhaustive search of the literature on this industry was conducted. These
sources
included
related
books
and
journals,
trade
literature,
marketing
literature,
other
product/promotional literature, annual reports, security analyst reports, and other publications.
Subsequently, telephone interviews or email correspondence was conducted with marketing executives etc.
Other sources included related magazines, academics, and consulting companies.
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Global and China Mobile Payment Industry Report, 2019-2025
Table of Contents
1. Overview ................................................................................................................................................................. 7
1.1 Definition ....................................................................................................................................................... 7
1.2 Classification ................................................................................................................................................. 7
1.3 Industry Chain ............................................................................................................................................. 10
2. Global Mobile Payment Market ......................................................................................................................... 12
2.1 Overview...................................................................................................................................................... 12
2.2 Regional Development ................................................................................................................................ 13
2.2.1 United States ..................................................................................................................................... 13
2.2.2 Japan ................................................................................................................................................. 17
2.2.3 India .................................................................................................................................................. 20
2.3 Competitive Landscape................................................................................................................................ 26
2.4 Development Trend ..................................................................................................................................... 28
3. Chinese Mobile Payment Market ....................................................................................................................... 30
3.1 Overview...................................................................................................................................................... 30
3.2 Regulatory Policies ...................................................................................................................................... 30
3.2.1 Industry Access ................................................................................................................................. 31
3.2.2 Main Polices ..................................................................................................................................... 32
3.2.3 Payment License ............................................................................................................................... 34
3.3 Market Size .................................................................................................................................................. 43
3.4 Market Structure .......................................................................................................................................... 44
3.5 Enterprise Pattern......................................................................................................................................... 45
3.6 Mobile Payment Overseas Layout ............................................................................................................... 49
3.7 Development Trend ..................................................................................................................................... 50
3.7.1 Tougher Regulation of and Tighter Access to Payment Market........................................................ 50
3.7.2 Security Issue Is Taken Seriously ..................................................................................................... 52
3.7.3 Industry Trend ................................................................................................................................... 54
4. Mobile Payment Market Segments .................................................................................................................... 58
4.1 Third-party Mobile Payment........................................................................................................................ 58
4.1.1 Overview........................................................................................................................................... 58
4.1.2 Market Size ....................................................................................................................................... 60
4.1.3 Market Structure ............................................................................................................................... 61
4.1.4 Competitive Landscape..................................................................................................................... 61
4.2 Mobile Banking ........................................................................................................................................... 63
4.2.1 Overview........................................................................................................................................... 63
4.2.2 Market Size ....................................................................................................................................... 64
4.2.3 Competitive Landscape..................................................................................................................... 65
4.2.4 Development Trend........................................................................................................................... 67
4.3 Operators’ Mobile Payment ......................................................................................................................... 67
4.4 Barcode Payment ......................................................................................................................................... 69
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Global and China Mobile Payment Industry Report, 2019-2025
4.4.1 Technology........................................................................................................................................ 69
4.4.2 Status Quo ......................................................................................................................................... 70
4.4.3 Presence of Enterprises ..................................................................................................................... 73
4.5 NFC Payment............................................................................................................................................... 74
4.5.1 Technology........................................................................................................................................ 74
4.5.2 Market Size ....................................................................................................................................... 77
4.5.3 Presence of Enterprises ..................................................................................................................... 81
4.5.4 HCE Cloud-based QuickPass ........................................................................................................... 82
4.6 Biometric Identification Payment ................................................................................................................ 84
5. Mobile Payment Users in China ......................................................................................................................... 87
5.1 Overview...................................................................................................................................................... 87
5.2 Characteristics of Mobile Payment Users .................................................................................................... 87
5.3 Using Behaviors of Mobile Payment Users ................................................................................................. 90
5.4 Attributes and Behavior Preferences of Mobile Payment Users .................................................................. 98
6. Mobile Payment-related Industry Chain ......................................................................................................... 105
6.1 Mobile Netizens ......................................................................................................................................... 105
6.2 Consumer Terminal Devices ...................................................................................................................... 107
6.3 Intelligent POS Machine............................................................................................................................ 108
6.3.1 Overview of Products ..................................................................................................................... 108
6.3.2 Market Size ..................................................................................................................................... 115
6.3.3 Trend of Products ............................................................................................................................ 120
Figure Index
Development Trends of Payment......................................................................................................................... 7
Classification of Payment Modes ........................................................................................................................ 8
Mobile Payment Industry Chain ........................................................................................................................ 10
Value Chain of NFC Mobile Payment ............................................................................................................... 11
Global Mobile Payment Transaction Value and Growth, 2016-2025E .............................................................. 12
Ranking of Countries by Mobile Wallet Usage Rate ......................................................................................... 13
Payment methods in the U.S., 2018 ................................................................................................................... 14
P2P Mobile Payment Transaction Value in the US, 2018-2023E ...................................................................... 15
Proximity Mobile Payment Transaction Value in the US, 2018-2023E............................................................. 16
Proximity mobile payment users in the US, by Platform, 2019 ........................................................................ 17
Major Electronic Payment Products in Japan .................................................................................................... 18
Number of Cashless Payment Users in Japan, 2016-2021E .............................................................................. 19
Mobile Payment Transaction Value Growth in India, 2015-2018...................................................................... 20
Development Status in India .............................................................................................................................. 23
Reasons for Choosing Digital Payment in India ................................................................................................ 24
Major Policies on Mobile Payment in India ...................................................................................................... 25
Mobile Payment Trend in India ......................................................................................................................... 25
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Global and China Mobile Payment Industry Report, 2019-2025
Potential Mobile Payment Users in India, 2015&2020E ................................................................................... 25
Classification of Third-party Payment Licenses and Regulators ....................................................................... 35
Number of Payment Licenses Issued to Non-Banking Institutions in China, 2015-2019 ................................. 35
Number of Payment Licenses Issued in China by Type by the End of 2019 ..................................................... 36
Chinese Mobile Payment Market Size, 2015-2025E ......................................................................................... 44
Chinese Mobile Payment Market Structure, 2015-2025E ................................................................................. 44
Mobile Payment Transactions in China by Operating Model ............................................................................ 48
The Enterprises with Cross-border Payment License in China ......................................................................... 49
China Nets Union Clearing Corporation as a Regulator on Payment Institutions ............................................. 51
Trends of Policies on Mobile Payment in China ............................................................................................... 52
Ways for Chinese Payment Users to Contact Defrauds, 2019 ........................................................................... 53
Trends of Presence in Mobile Payment Business .............................................................................................. 55
Development Trends of Mobile Payment Platform ........................................................................................... 56
Trends of Cooperation between Mobile Payment Enterprises ........................................................................... 56
Mobile Payment Transactions in China, 2019-2025E ....................................................................................... 57
Chinese Mobile Payment Market Structure, 2025E........................................................................................... 57
Main Characteristics of Third-party Mobile Payment ....................................................................................... 58
Third-party Mobile Payment Industry Chain in China ...................................................................................... 60
Chinese Third-party Mobile Payment Market Size, 2015-2025E ...................................................................... 60
Structure of Third-party Mobile Payment Transactions in China by Type of Business, 2018-2019 ................. 61
Market Share of Third-party Mobile Payment in China, 2018-2019 ................................................................. 62
Mobile Banking Industry Chain ........................................................................................................................ 64
Mobile Banking Transactions in China, 2015-2025E ........................................................................................ 65
Mobile Phone Bank Users Scales of Major Banks in China, as of the end of 2018 .......................................... 65
Market Share of Mobile Banking in China, 2017-2018..................................................................................... 66
Operators’ Operating Models of Mobile Payment ............................................................................................. 68
Mobile Operators Dominate Mobile Payment Value Chain .............................................................................. 68
Framework of QR Code Payment System ......................................................................................................... 69
2D Barcode Payment Industry Chain ................................................................................................................ 70
Quarterly Transactions Scale of China's Off-Line Scan Payment, 2017-2019 .................................................. 72
Transaction Scale of China Integration Payment Market, 2016-2025E............................................................. 73
Modes of Unionpay 2D Barcode Payment ........................................................................................................ 74
Development Course of NFC Technology ......................................................................................................... 75
Technical Framework of NFC ........................................................................................................................... 75
Operating Models and Components of NFC Reader/Writer .............................................................................. 76
Main Implementations of SE in NFC ................................................................................................................ 77
China Mobile NFC Payment Transaction Scale, 2017-2019 ............................................................................. 80
NFC Payment Industry Chain ............................................................................................................................ 81
Process of NFC Payment ................................................................................................................................... 82
Installation of Cloud QuickPass ........................................................................................................................ 83
Mobile Phone Flash Payment Products Supporting UnionPay Mobile Phone Flash Payment .......................... 84
Development Trend of No-cash Society in China ............................................................................................. 86
Mobile Payment Users Structure in China by Gender, 2017-2018 .................................................................... 88
Mobile Payment Users Structure in China by Age, 2017-2018 ......................................................................... 88
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Global and China Mobile Payment Industry Report, 2019-2025
Educational Background of Mobile Payment Users in China, 2017-2018 ........................................................ 89
Distribution of Mobile Payment Users in China by Region, 2017-2018 ........................................................... 89
Distribution of Mobile Payment Users in China by Region, 2017-2018 ........................................................... 90
Frequency of Mobile Payment by Users in China, 2017-2018 .......................................................................... 91
Amount Per Payment of Mobile Payment Users in China, 2017-2018 ............................................................. 91
Account Type Structure Used by Mobile Payment Users, 2018 ........................................................................ 92
Main Reasons for Using Mobile Payment in China, 2018 ................................................................................ 93
Proportion of Users Expecting Mobile Payment Development, 2018 ............................................................... 93
Problems with Usage of Mobile Payment by Users in China, 2017-2018......................................................... 94
Proportion of Security Problems Encountered by Mobile Payment Users, 2018 .............................................. 95
Proportion of Problems Mobile Payment Users Think to Solve in Client Terminals, 2018 .............................. 95
Proportion of Customer Rights Protection Measures Expected by Mobile Payment Users, 2018 .................... 96
Proportion of Problems Mobile Payment Users Concerned, 2018 .................................................................... 97
Analysis of Network Consumption Period, 2018 .............................................................................................. 97
Major Industries to Which Mobile Payments Are Applied, 2018 ...................................................................... 98
Payment Methods of Mobile Payment in China, 2018 ...................................................................................... 99
Proportion of Users Aaccepting Barcode Payment, 2018 .................................................................................. 99
Barcode Pay Scenarios of Chinese Mobile Payment Users, 2017-2018 .......................................................... 100
Proportion of Payment Methods Used by China Mobile Payment Users to Take Public Transportation, 2018
................................................................................................................................................................. 100
Proportion of Payment Methods Used by China Mobile Payment Users for High Speed Payment, 2018 ...... 101
Proportion of China Mobile Payment Users Knowing about Mobile Payment Policies, 2018 ....................... 102
Mobile Payment Users’ Awareness of New Mobile Payment Technologies in China, 2017-2018 .................. 102
Mobile Payment Users’ Acceptance of Biometric Recognition Technology in China, 2017-2018 ................. 103
Comparison of Users' Concerns in Mobile Payment Using Biometrics in China, 2018.................................. 104
Netizen Scale in China, 2015-2025E ............................................................................................................... 105
Mobile Netizens in China, 2015-2025E........................................................................................................... 106
% of Mobile-terminal Online Payment Transactions in China, 2017-2018 ..................................................... 106
Global Smartphone Shipment, 2015-2025E .................................................................................................... 107
Global NFC-enabled Mobile Phone Shipments, 2015-2018 ........................................................................... 107
Number of Merchants Joining the UnionPay Network in China and YoY Growth, 2007-2025E.................... 115
Number of New Merchants Joining the UnionPay Network in China and YoY Growth, 2007-2025E ........... 116
Number of POS Terminals Joined the UnionPay Network in China and YoY Growth, 2007-2025E.............. 117
Number of New POS Terminals Joined the UnionPay Network in China and YoY Growth, 2007-2025E ..... 118
Number of Bankcards for Every POS Terminal in China, 2007-2025E .......................................................... 119
POS Terminal Ownership per Thousand People in China, 2007-2025E ......................................................... 119
China's POS Terminal Shipments, 2015-2025E .............................................................................................. 120
Functional Evolution of Intelligent POS Terminal .......................................................................................... 121
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Global and China Mobile Payment Industry Report, 2019-2025
Table Index
NFC Payment VS Remote Payment .................................................................................................................... 8
Comparison of Main Mobile Payment Technologies........................................................................................... 9
2D Barcode Payment VS NFC Payment............................................................................................................ 10
Main Applications of Mobile Payment .............................................................................................................. 11
Mobile Wallet Usage Rate for Users of Different Ages Worldwide .................................................................. 13
Financing Cases of Paytm, 2015-2019 .............................................................................................................. 21
Events in Leading Mobile Payment Firms’ Layout in India .............................................................................. 22
Comparison of Major Mobile Payment Platform in India ................................................................................. 23
Major Mobile Payment Enterprises and Products Worldwide by Country ........................................................ 26
Major Mobile Payment Platform Worldwide..................................................................................................... 27
Interpretations of Regulations on the Online Payment Business of Non-Banking Payment Institutions .......... 31
Main Policies on Mobile Payment in China, 2011-2019 ................................................................................... 32
Enterprises Having been Cancelled Payment Business License by the End of 2019 ........................................ 36
Enterprises Having Obtained Payment Business License by the End of 2019 .................................................. 37
Major Operating Models and Participants of Mobile Payment in China, 2019 ................................................. 45
Major Payment License Acquisitions in China, 2014-2019 .............................................................................. 47
Overseas Layout of Mobile Payment Firms, 2019 ............................................................................................ 49
Key Regulatory Policies & Contents on Chinese Payment Institutions ............................................................ 51
Vulnerabilities of Mobile Payment .................................................................................................................... 53
Development Trends of Mobile Payment Business ........................................................................................... 55
Implementations and Merits & Demerits of Mobile Banking ........................................................................... 63
Classification of Mobile Banking ...................................................................................................................... 63
Development Trends of Mobile Banking........................................................................................................... 67
Major Devices/Facilities for and Functions of 2D Barcode Payment................................................................ 69
Development History of Barcode Payment ....................................................................................................... 71
NFC-enabled Cellphone Models Officially Released in China, 2019 ............................................................... 79
Development History of Cloud-based QuickPass in China, 2015-2019 ............................................................ 83
Development of Chinese Face Payment Equipment .......................................................................................... 85
Comparison of Offline Mobile Payments ........................................................................................................ 108
Imagpay Breakdown Products and Characteristics .......................................................................................... 111
Product Characteristics of Major Imagpay Manufacturers in China ............................................................... 112
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Global and China Mobile Payment Industry Report, 2019-2025
1. Overview
1.1 Definition
Mobile payment is also known as smartphone payment. It mainly refers to a mode of service that
users can pay for goods or services through mobile terminal devices (smartphone, tablet PC, etc.).
Units or individuals directly or indirectly give payment instructions to banks and financial
institutions for monetary payment and money transfer through mobile devices, internet or
proximity sensor, thus successfully achieving mobile payment. Mobile payment integrates terminal
devices, internet, APP providers and financial institutions, providing users with financial services
like monetary payment.
Traditional payment consists of banking payment and non-banking payment. Wherein,
non-banking payment market falls into POS offline payment and online payment, of which the
latter is split into internet payment and mobile payment. For a long time, banking payment and
POS offline payment have been dominant in China’s payment market, and UnionPay is the leader.
Development Trends of Payment
Source: ResearchInChina
1.2 Classification
By payment distance and interactive mode, mobile payment can be divided into remote mobile
payment and NFC mobile payment.
1) Remote payment refers to a method of payment that users use short message or GPRS to give
payment instructions through network provided by mobile operators, and get connected by
backstage system to complete payment. Users can enjoy banking payment and other services
through sending short message or logging in network with mobile devices.
2) NFC payment refers to a method of payment that users use near field communication
technology (NFC) or Bluetooth and infrared technologies on their mobile terminals to realize
information interaction with merchants (like convenience stores, shopping malls and buses) who
have POS devices, for money transfer. It primarily includes 2D barcode payment and NFC
payment.
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Global and China Mobile Payment Industry Report, 2019-2025
In recent years, as mobile communication technology developed rapidly, intelligent terminals kept
spreading and financial IC cards posted wide application, mobile payment has been a new
development direction of electronic payment.
Classification of Payment Modes
Source: ResearchInChina
NFC Payment VS Remote Payment
Online Payment
Offline Payment
Remote payment
NFC payment
Application
Highly electronic products and services
Products and services of physical stores,
Scenes
like E-commerce platform
such as shops, shopping malls, cinemas and
Mean
of
Transaction
buses.
Technological
Communication
Support
terminal, short massage, GPRS, etc.
network,
client
Near field communication (NFC), 2D barcode
code, sound wave, fingerprint, infrared,
Bluetooth, etc.
Payment Limit
Security Level
In general, payment limit is high,
For
depending on balance and quota of
consumption
accounts of source of funds.
RMB1,000.
Have low requirements on security; SIM
Have high requirements on security; need
card authorization is available.
authorization of financial institutions.
Source: ResearchInChina
8
micropayment,
limit
single
are
deposit
restricted
and
within
Global and China Mobile Payment Industry Report, 2019-2025
Comparison of Main Mobile Payment Technologies
Payment Technology
Definition
Scenario
Near Field Communication,
Apple Pay uses NFC technology
i.e.,
to
near-field
communication
NFC
allows
data
non-contact
data
wireless
technology,
exchange
via
point-to-point
transmission
between
electronic devices
bind
Advantages and Disadvantages
various
bank
cards;
iPhone completes payment by
approaching POS machine;
Wearable devices can be a major
application carrier by virtue of
NFC technology
Point-to-Point
near-filed
communication ensures confidentiality
and security of data transmission and
quicker payment without networking;
A
more
complicated
ecosystem;
collaboration among chip suppliers,
mobile phone vendors & merchants,
UnionPay, and consumers
Host Card Emulation is a new
NFC technology launched by
HCE
Google at the end of 2013.
China
developed
Free from limitations of hardware
With physical security module
QuickPass by combining HCE and
security carrier on mobile payment
of traditional NFC replaced by
Token
and ensure security;
remotely-hosted
achieving offline
cloud
SE,
UnionPay
technologies,
payment
mobile devices can achieve
non-contact
safe
remote online payment.
NFC
communication
finally
terminals
on
Support only Android NFC mobile
and
phones and apply to only POS devices
with QuickPass function
even without SE hardware
module
Magnetic
Secure
Transmission
can
control
magnetic field via emitter to
wirelessly
MST
transmit
magnetic-stripe data to POS
machine,
card-swiping
and
complete
by
simulating
Samsung launched Samsung Pay
mobile payment service which
supports both NFC and MST
payment
technologies
to
compete against Apple Pay.
Compatible
with
traditional
magnetic-stripe POS machines, and
merchants don’t need to upgrade POS
machines’
Only Samsung Galaxy S6 edge +
Galaxy Note 5 support the technology
card-swiping
Conduct
identification
physiological
Biometric
Technology
Recognition
features
with
Alibaba
and
face-recognition
behavioral
characteristics;
fingerprint
payment,
launched
Alipay
technology
Convenient
and
fast
verification
“Smile to Pay”;
methods, better user experience;
Apply Pay makes payment via
recognition rate needs to be improved,
face-scanning payment and
fingerprint
and security remains to be verified
iris payment for now
ID”.
recognition
Source: ResearchInChina
9
“Touch
Global and China Mobile Payment Industry Report, 2019-2025
2D Barcode Payment VS NFC Payment
2D Barcode Payment
Payment Method
Merchants
scan
2D
NFC Payment
barcode
generated by APP on consumers’
Consumers’ smartphones touch
merchants’ POS devices.
smartphones
Security
Automatically
generate
2D
Automatically
generate
barcode
accounts
Hardware Requirement
Low
High
Network
Need mobile internet
Available with network
Industry Chain
Relatively short
Relatively long
Beneficiary Side
Clear pattern
Complicated pattern
Environment
virtual
Requirement
Source: ResearchInChina
1.3 Industry Chain
The huge industrial chain of mobile payment determines that participants of the whole industry
chain will be far more than those of traditional electronic payment industry, from upstream
technology and solution providers and equipment manufacturers to mobile payment enterprises
such as telecom operators, third-party payment companies, bank card organizations, commercial
banks, to the downstream merchants, all promoting the development of the whole industry in
cooperation and competition.
Mobile Payment Industry Chain
Source: ResearchInChina
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Global and China Mobile Payment Industry Report, 2019-2025
Value Chain of NFC Mobile Payment
Source: ResearchInChina
Main Applications of Mobile Payment
Application Fields
Application Scenes
Information Commutation
Customized information, software download, QQ, WeChat
Entertainment
Game, song, ringtone, photo download
Public Utility Charges
Water, electricity, coal fees, telephone charges, parking fees
Commerce
Online shopping, catering payment, supermarket shopping, air ticket purchase
Finance
State bonds purchase, funds, stocks, debt repayment
Source: ResearchInChina
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Global and China Mobile Payment Industry Report, 2019-2025
2. Global Mobile Payment Market
2.1 Overview
In the past decade, the rapid development of mobile payment has greatly improved the
inclusiveness and availability of global financial services. At the same time, mobile payment has
become an entrance and platform, gradually extending to a variety of services such as wealth
management, loans, education, medical care, mobility and entertainment, and fully penetrating
into users’ life. This has amplified the breadth and depth of the global digital revolution, as well as
raised the price and status of payment service organizations.
At present, the development of global mobile payment has reached a new high, which is
manifested by the radical expansion of payment institutions, the steady spike in transaction
amount, a rising number of users, and the emergence of new service solutions which fill the gaps
in the traditional financial system.
In 2018, the global mobile payment transactions fetched USD4.296 trillion, a year-on-year
increase of 38.4%. A high growth rate is expected in the next few years, and the transaction
amount will be USD23.145 trillion by 2025.
Global Mobile Payment Transaction Value and Growth, 2016-2025E
Trasaction Value (USD bn)
YoY Growth (%)
2016
2017
2018
2019E
2020E
2021E
2022E
2023E
2024E
2025E
2,211
3,104
4,296
6,109
8,961
11,141
13,979
16,772
19,846
23,145
40.4%
38.4%
42.2%
46.7%
24.3%
25.5%
20.0%
18.3%
16.6%
Source: Merchant Machine; ResearchInChina
At present, China has the highest mobile payment penetration rate in the world, with about 47%
of mobile phone holders using mobile & digital wallets; the second-ranked Norway sees a
utilization rate of 42%, which is significantly higher than other European countries.
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Global and China Mobile Payment Industry Report, 2019-2025
Ranking of Countries by Mobile Wallet Usage Rate
Source: Merchant Machine; ResearchInChina
In terms of age, people aged 18-34 exploit mobile payment most often, and 48% of them use
mobile wallets.
Mobile Wallet Usage Rate for Users of Different Ages Worldwide
Age
Mobile wallet usage
Without mobile wallet
Without mobile wallet
but be interested
and interest
18-34 years old
48%
32%
20%
35-44 years old
44%
32%
24%
45-54 years old
37%
30%
33%
55-64 years old
29%
27%
43%
Over 65 years old
22%
28%
50%
Source: Merchant Machine; ResearchInChina
2.2 Regional Development
2.2.1 United States
Limited by communication technologies, national policies, and users’ habits, the development of
mobile payment in different countries varies.
As a pioneer in mobile payment filed, the United States has led the trend in innovation in mobile
technology. However, due to its powerful credit card system and users’ long-standing habits of
paying by credit card, mobile payment industry has developed slowly and the penetration of
mobile payment remains low.
U.S. consumers aren’t lacking options when it comes to paying on their phones. There’s Apple Pay,
Google Pay, Samsung Pay, PayPal, Venmo, Square Cash, Zelle and newcomers looking to disrupt
that entire list.
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Global and China Mobile Payment Industry Report, 2019-2025
The environment in the United States is not conducive to the promotion of mobile payments.
People in the United States, Japan, and Europe are extremely sensitive to personal privacy and
data security, so they do not prefer mobile payments. In addition, mobile payments are under the
radar of the national financial regulatory system and policies, and the government must fully
evaluate the challenges and impacts that new payment methods may bring. Therefore, mobile
payments develop slowly in the United States, Japan, and Europe where traditional payment
methods prevail.
Conventional methods are still winning in the U.S. Last year, 80% of consumers used credit cards
for purchases, according to Bain. PayPal was the most popular nonbank option at 40% adoption
but is largely used for online payments. Apple Pay had 9% adoption.
Payment methods in the U.S., 2018
Source: Bain/Research Now Retail Banking NPS Survey 2018; ResearchInChina
Facebook Pay is a social network-based payment method similar to WeChat Pay. It boasts massive
users, connecting WhatsApp, Instagram and Messenger with Facebook to activate the users of
these high-traffic and high-DAU applications at one time. Unlike Apple and Google which are
backed up by hardware and software systems or independent payment tools PayPal and Square,
Facebook uses its own social network as a platform to embark on fintech services.
Peer-to-peer (P2P) payments are increasing significantly in the US, driven by tremendous growth
from Venmo and Zelle. Our latest estimates show that P2P mobile transactions will total $309.95
billion this year, growing 27.9% to hit $396.48 billion in 2020.
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Global and China Mobile Payment Industry Report, 2019-2025
The number of P2P payment users will continue to grow as well: We estimate that there will be
69.2 million users in the US this year, rising to 73.8 million by 2020.
Venmo, acquired by PayPal in 2013, reported strong Q2 results, with total payment volume
increasing 70% year over year to 24 billion transactions in the quarter. Dan Schulman, president
and CEO of PayPal, said the company expects Venmo will drive a total payment volume of nearly
$100 billion by the end of 2019.
Zelle, owned by seven of the biggest US banks, similarly reported strong second-quarter results
this year. The company said that payment value grew 56% to $44 billion, and the number of
transactions grew 71% to 171 million.
P2P Mobile Payment Transaction Value in the US, 2018-2023E
Source: eMarketer, ResearchInChina
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Global and China Mobile Payment Industry Report, 2019-2025
In 2023, near-field-communications or other contactless technologies are projected to generate
over 220 billion U.S. dollars in transaction value. As of 2018, about 25.3 percent of smartphone
users in the United States were actively using proximity mobile payment services. Industry
experts project mobile proximity payments to be amongst the most successful future mobile
payment methods. Popular application areas are paying for transport and transit, as well as retail
goods and services. According to a survey of digital payment users, the most common mobile
in-store mobile payment method was barcode or QR code scanning and a further 12 percent had
waved or tapped their mobile phone to pay at check out. Mobile wallet apps are used to facilitate
mobile payments. PayPal, Google Wallet and Apple Pay are amongst the most popular digital wallet
services according to users in the United States. A current example of mobile proximity payment
usage is Starbucks. The coffee retailer allows customers to pay via mobile app by waving their
phone at the checkout counter.
Proximity Mobile Payment Transaction Value in the US, 2018-2023E
Source: eMarketer, ResearchInChina
Apple Pay had 30.3 million users as of Oct 2019, taking up 47.3% of all mobile payment users in
the U.S., becoming the most popular method of mobile payments.
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Global and China Mobile Payment Industry Report, 2019-2025
Increasingly, many American stores accept Apple Pay over other proximity mobile payment
platforms, which can explain its dominance. Apple Pay is available already at major retailers such
as Target, Walmart and Costco. Usage of proximity mobile payments depend upon both consumer
adoption and retailer acceptance and since Apple has a strong brand, people are more willing to
use new services within its ecosystem. However, more retailers are also starting to accept Google
Pay and other platforms.
Proximity mobile payment users in the US, by Platform, 2019
Source: eMarketer, ResearchInChina
2.2.2 Japan
Japan is a forerunner of mobile payment. It started to develop mobile payments more than a
decade ago. However, due to the rapid aging of the population, the elderly rejects the cashless
policy promoted by the country, which has largely suppressed the development of mobile
payments in Japan.
Nevertheless, this situation is changing quietly. Under the joint efforts of the Japanese
government, local enterprises, and foreign mobile payment vendors, the competition in the
Japanese mobile payment market is simmering.
Line introduced Line Pay worldwide on December 16, 2014. The service allows users to request
and send money from users in their contact list and make mobile payments in store. The service
has since expanded to allow other features such as offline wire transfers when making purchases
and ATM transactions like depositing and withdrawing money.
Rakuten Pay, a mobile-only payment system, was launched in 2016 by the leader of the Japanese
e-commerce segment, Rakuten. Rakuten Pay is the largest QR code payment service in Japan by
the number of users
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Global and China Mobile Payment Industry Report, 2019-2025
PayPay Corp., which is a mobile payment firm jointly run by SoftBank Group Corp. and Yahoo
Japan, is partnering with Ant Financial to allow Alipay users to make payments with their app at
PayPay-ready stores. Alibaba is part of the SoftBank group. PayPay also announced in November
2018 that it will launch a JPY10 billion rebate campaign starting from December 2018 through
March 2019 in which customers can receive a 20% rebate for every purchase through the PayPay
mobile payment platform. The limit of the rebate is JPY50,000 per month and the campaign will
end when PayPay gives back JPY10 billion in total.
Apple and Google have entered the Japanese mobile payment market through their respective
platforms, Apple Pay and Google Pay. South Korean mobile payment firm Kakao Pay is also looking
to enter Japan, betting on Tokyo’s push to go cashless
At the end of 2017, more than 40,000 stores in Japan introduced Alipay and WeChat Pay, 99% of
whose users are Chinese who come to Japan for travel and business, and Chinese students.
Tourism, especially from China, has been one of the few economic bright spots in Japan, and
Chinese tourists use the mobile payment system Alipay and WeChat Pay at over 300,000 Japanese
merchants.
At present, local payment instruments represented by Rakuten, Line Pay and PayPay, American
payment tools represented by PayPal, and Chinese payment giants Alipay and WeChat compete
with each other in Japan. From the perspective of commercial competition and market dividends,
mobile payments are rapidly becoming a vibrant market in Japan.
Major Electronic Payment Products in Japan
Source: ResearchInChina
Estimates by the government using 2015 data from organizations including the World Bank and
BIS show Japan’s cashless rate was only 18.4%, while that of China was 60%, South Korea’s was
89.1%, and Europe and America fetched 40-50%.
In 2018 the Ministry of Economy, Trade and Industry (METI) released a document titled Cashless
Vision evaluating Japan’s current standing on cashless transactions and settlements, and outlining
the actions it will take to achieve its goal of increasing cashless settlements’ ratio to 40% by 2025
and outlining its intention to eventually reach 80% beyond that date.
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Global and China Mobile Payment Industry Report, 2019-2025
According to InfoCom Research, Inc., as of March 2019, the number of people using cashless
payment methods had grown significantly. Apparently, mobile payments tended to surpass
electronic money to become the mainstay of Japan's future payment methods.
Number of Cashless Payment Users in Japan, 2016-2021E
2500
2000
1500
1000
500
0
2016
2017
2018
2019
2020
2021
Number of users with mobile wallet payment
Number of users with smartphone QR code payment
(10,000 people)
2016
2017
2018
2019
2020
2021
Number of users with mobile wallet payment
640
893
1157
1435
1691
1953
Number of users with smartphone QR code payment
62
187
512
960
1422
1880
Note: the users refer to active users who use it more than once a month
Source: ICT, ResearchInChina
Japan's mobile payment development model relies on mobile operators to coordinate upstream
and downstream companies in the mobile payment value chain. At present, Japan's mobile
payment services have been applied to electronic money payment systems, prepaid phone &
recharge systems, corporate registration & management, identification card systems, and train
ticket purchase systems.
RFID has been widely used in Japan as mobile payments at PoS terminal in a similar way as NFC.
People can purchase goods through their mobile phones, there is an RFID reader and a menu that
has built-in RFID chips. Customers plug the reader into their mobile phones and point them at the
item on the menu that they wish to buy. The bill is charged through the mobile phone. In Japan
people can also pay through the cell phone number, or through an RFID chip, using the mobile
e-wallet system developed by NTT DoCoMo.
The operator NTT DoCoMo enjoys more than 50% share of the Japanese mobile communications
market, and it has been favored by government policies, which enables it to establish a unified
mobile payment platform and guide financial institutions and third-party payment platforms to
provide services around telecommunications operators.
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Global and China Mobile Payment Industry Report, 2019-2025
2.2.3 India
The Indian government has been promoting the development of the mobile payment ecosystem
through favorable policies. Measures include providing incentives and subsidies to consumers and
merchants, building modern payment infrastructure, implementing a digital economy literacy plan,
and optimizing business processes. Plus benefiting from the popularity of smartphone as well as
the development of innovation ecology, India has become one of the countries with the fastest
growth in mobile payment.
According to data from the Bank for International Settlements, the volume of Indian mobile
payment transactions in 2018 increased by 55% year-on-year, ranking first in the world.
The number of mobile payment transactions per capita in India increased from 2.4 person-times
in 2014 to 22.42 person-times in 2019, and the proportion of mobile payment transactions in GDP
increased from 7.14% in 2016 to 8.42% in 2018. Meanwhile, according to KPMG's India mobile
payment report 2019, digital payment transactions in India will grow at a compound annual
growth rate of 20.2% from 2019 to 2023, and India is shifting to a cashless country.
Mobile Payment Transaction Value Growth in India, 2015-2018
Source: Bank for International Settlements; ResearchInChina
At present, mobile payments involving public utilities such as donations, taxes, and tuition fees are
currently India's most mature businesses, followed by financial services like wealth management,
insurance and loans. In the Indian market, a considerable number of people still do not have
access to the financial services of traditional banks, while popular mobile financial services will
help them.
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Global and China Mobile Payment Industry Report, 2019-2025
Currently, multiple payment gateway operators (including Paytm, Mobikwik and Bharat Bill) and
payment aggregation service providers (such as BillDesk, PayU India, CCAvenue and Razorpay)
have emerged in India.
Paytm has become a leader in the Indian mobile payment market, with more than 250 million
users. Paytm is India's largest leading payment gateway that offers comprehensive payment
services for customer and merchants. Paytm offers mobile payment solutions to over 7 million
merchants and allow consumers to make seamless mobile payments from Cards, Bank Accounts
and Digital Credit among others. Its investors include Softbank, SAIF Partners, Alibaba Group and
Ant Financial.
Financing Cases of Paytm, 2015-2019
Time
Event
Sept 29, 2015
Ant Financial & Alibaba has invested USD680 million in Paytm, acquiring
40% stake in the venture
2017
Paytm raised USD1.4 billion from Softbank
2018
Paytm raised USD300 million from Warren Buffett's Berkshire Hathaway in
September 2018
2019
Paytm raised USD1 billion to bolster its merchant and financial services play
in its latest financing round led by US-based asset management firm T
Rowe Price. The fresh investment round saw the participation of Discovery
Capital and D1 Capital, who invested primary capital along with T Rowe
Price. The three participants together poured in USD400 million in the
payment firm whereas Paytm’s existing investors SoftBank (USD200 Mn)
and Alibaba Group affiliate Ant Financial (USD400 Mn) put in USD600
million together.
Source: ResearchInChina
In addition, Google, Facebook, Alibaba, Amazon, SoftBank and other international giants have
entered the Indian mobile payment market by different ways.
Indian technology giants are also scrambling for a share of that pie. The online cab aggregator Ola,
the e-commerce giants Flipkart and Snapdeal have launched their own mobile payment platforms.
Airtel launched its first payment bank in India in 2016.
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Global and China Mobile Payment Industry Report, 2019-2025
Events in Leading Mobile Payment Firms’ Layout in India
Firms
National
Layout
Payments
Corporation of India (NPCI)
NPCI launched the app Bharat Interface for Money (BHIM) in December 2016. Based on
the Unified Payments Interface (UPI) which makes users transfer money between
banks and mobile wallets, BHIM is a governmental mobile wallet for money transfer and
transactions. It features one-stop converged services.
Samsung
In December 2016, Samsung began testing mobile services in India. Recently, it has
launched smartphone updates, including a Samsung payment application. However,
Samsung Pay is only available on high-end Samsung smartphones, which limits its
coverage.
WhatsApp
In April 2017, WhatsApp announced the launch of its electronic payment services in
India. This is the overseas debut of WhatsApp's electronic payment business.
Google
In September 2017, Google officially launched Tez, a mobile payment application
tailored for India. Tez supports Apple and Android simultaneously. It also collaborates
with local merchants widely and attracts users through subsidies. Although Tez does not
support deposits, users can transfer money via UPI or "Audio QR Code". At present, Tez
has been adopted by some payment gateway operators such as PayU and corporate
websites such as redBus (an online bus ticketing platform)
Amazon
In July 2017, Amazon introduced a semi-closed e-wallet to the Indian market. It not
only supports online payments, but also enables users to deposit money. Local people
can use this wallet at www.amazon.in, India's largest coffee chain Cafe Coffee Day and
the fast food restaurant Faasos.
FreeCharge
In
March
2017,
Snapdeal committed
to
investing
an
additional
USD20
million in FreeCharge to further develop the mobile payment business.
Mobikwik
As of September 28, 2017, MobiKwik had ranked 15th in the iOS App Store in India and
raised a total of USD162 million from investors including Sequoia Capital, Times Group
(an Indian media conglomerate) and American Express Ventures.
Xiaomi
In December 2017, Xiaomi made a regulatory filing with the Registrar of Companies
(RoC) in India, revealing the company’s plan for expansion in the country. As per report,
the filing indicates that the Chinese smartphone maker wants to sell electric vehicles in
India and enter the mobile payment market. On March 20, 2019, Xiaomi expanded its
Mi Pay mobile payments service to India. Testing was finally completed and Indian
users get full access to Mi Pay. The platform is built on the Unified Payments Interface
(UPI) in collaboration with National Payments Corporation of India (NPCI) and ICICI
Bank and supports more than 120 banks.
WeChat
Indian media Entrackr reported on March 22, 2019 that Tencent will launch
UPI-powered payments app WeChat Pay in India
Source: ResearchInChina
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Global and China Mobile Payment Industry Report, 2019-2025
Comparison of Major Mobile Payment Platform in India
Source: ResearchInChina
India is another emerging mobile payment market. Common cash transactions have severely
hindered the development of E-commerce in the country. Local and foreign E-commerce
enterprises in Indian have launched a series of mobile payment systems and tried to transform
consumers’ habit of cash payment into mobile payment so as to seize great business
opportunities.
Development Status in India
Source: India Development Fund; ResearchInChina
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Global and China Mobile Payment Industry Report, 2019-2025
Reasons for Choosing Digital Payment in India
Source: Google; ResearchInChina
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Global and China Mobile Payment Industry Report, 2019-2025
Major Policies on Mobile Payment in India
Source: ResearchInChina
Mobile Payment Trend in India
Source: Paytm, ResearchInChina
Potential Mobile Payment Users in India, 2015&2020E
Source: Google, ResearchInChina
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Global and China Mobile Payment Industry Report, 2019-2025
2.3 Competitive Landscape
At present, mobile payment is primarily carried out by financial institutions of banking industry,
international card companies, operators, internet tech firms and third party payment institutions.
Viewed in global market, business mode of remote payment can be divided into mobile operator
leading mode, App Store leading mode, third party payment institution leading mode and card
organization leading mode based on different transaction and payment account types.
Mobile operator leading mode: according to fund flow, the mode can be divided into two links,
namely, telephone recharging and goods transaction. Profit modes of the two links are varied due
to different duties untaken by different participants.
In telephone recharging link (recharging via bank card account), mobile operator gains profit from
payment transaction commission provided by merchant, while card issuer(commercial bank),
clearing house (card organization) and acquirer (commercial bank or non-financial payment
institute) gain profit based on pricing and profit sharing rule set by card organization.
In goods transaction link, all goods are subjected to settlement via telephone account. Mobile
operator undertakes core duties of card issuance and acceptance. Therefore, mobile operator
shares profits with third party payment institution and service provider based on certain
proportion and digital product revenue, and usually enjoys high deduction rate greater than
payment commission deduction rate under card organization mode. For business district app
owned by mobile operator, mobile operator obtains all profits.
Although the mobile operator leading mode developed well from the end of 1990s to the early of
21stcentury, it is gradually replaced by novel remote payment mode with fast popularization of
smart phone, development of third party payment institution and due to high deduction rate
charged by mobile operator. Besides, more and more business district app providers select other
payment modes to complete transaction.
Major Mobile Payment Enterprises and Products Worldwide by Country
Region
Major Mode
Leading mobile payment enterprise or product
USA
Multiple operation modes
Visa, Stripe, Paypal, Google Wallet, Apple Pay, Isis NFC and
Squar, etc
Japan
Mobile operator leading
NTTDoCoMo, KDDI and SoftBank
Korea
Mobile operator leading
KT, KTF and LGT
India
Third party payment leading
Paytm
China
Multiple operation modes
Alipay, Tenpay, Quick Pass, Mobile Banking Service, etc.
Europe
Bank leading
European mobile payments are mainly focused on online
payment, while various offline payment scenarios are barely
supported
Source: ResearchInChina
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Global and China Mobile Payment Industry Report, 2019-2025
Major Mobile Payment Platform Worldwide
Enterprise
Introduction
Apple Pay
Apple Pay, an NFC-based mobile payment function released by Apple, was officially launched in the
United States on October 20, 2014. On February 18, 2016, Apple Pay landed in China. An estimated
43% of iPhone users across the globe have enabled Apple Pay, which means there are approximately
383 million Apple Pay users. By the end of 2019, Apple Pay had been available in more than 50
countries and regions around the world.
Mi Pay
On September 1, 2016, Chinese smartphone maker Xiaomi launched its Mi Pay NFC- based mobile
payments service in its domestic market, in collaboration with bankcard association China UnionPay.
It supports debit and credit cards, as well as public transportation cards across the country via its
phones supporting NFC. On December 20, 2018, BusinessLine reported that Xiaomi received an
approval from the National Payment Corporation of India (NPCI) to launch its payment service, Mi
Pay, in India.
Samsung Pay
On March 29, 2016, Samsung Pay was officially launched. Samsung Pay uses Near Field
Communication (NFC) and Magnetic Secure Transmission (MST) technologies, meaning users can
simply swipe cards with their Samsung mobile phones. As of May 2019, Samsung Pay had attracted
more than 14 million users in more than 25 countries worldwide.
Google Pay
Google officially launched the NFC payment service Android Pay on September 11, 2015. On January
8, 2018, Google announced a rebrand of its consumer payment products and merged Android Pay and
Google Wallet into a single, unified service known as Google Pay. As of 2019, Google Pay had provided
services in more than 30 countries and regions around the world.
Alipay
In 2004, Alipay separated itself from Taobao and gradually offered payment services to more partners.
In December 8, 2004, Zhejiang Alipay Network Technology Co., Ltd. was established. In February 27,
2008, Alipay launched the mobile e-commerce strategy and launched the mobile payment business.
Alipay has established strategic cooperative relations with more than 180 banks at home and abroad,
as well as VISA, MasterCard international organizations and other institutions. As of June 2019, Alipay
and its local wallet partners had served over 1.2 billion users worldwide.
WeChat Pay
On August 5, 2013, Tenpay and WeChat launched WeChat Pay officially, allowing users to perform
peer-to-peer transactions and mobile payments online and offline. In June 2018, WeChat Pay had
more than 800 million active accounts.
PayPal
Founded in December 1998, PayPal is an Internet-based third-party payment service provider
headquartered in San Jose, California, U.S.A., allowing transfer of funds between users who use
e-mail to identify themselves without mailing a check or remittance in the traditional way. PayPal now
reports a total user base of 277 million accounts — of which 255 million are consumers and 22 million
are merchants
Source: ResearchInChina
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Global and China Mobile Payment Industry Report, 2019-2025
2.4 Development Trend
I. Strengthening cooperation with various types of enterprises and improving APP interoperability
have become the priority strategic direction of the mobile payment industry
With the continuous development of mobile payment, mobile payment institutions are becoming
an indispensable partner for enterprises. The data shows that each mobile payment agency that
provides “business-to-person (B2P)” payment services is associated with an average of 237
companies.
At the same time, interoperability and compatibility between different mobile payment institutions,
mobile payment institutions and banks have been significantly enhanced. This not only enables
users to use mobile payment in a wider range of scenarios, but also brings the rapid expansion of
the payment industry and a significant improvement in user experience. The data shows a
significant increase in interoperability between global mobile payments and bank accounts. In
2018, the transaction volume between the two parties increased by 47%, and each mobile
payment institution communicating with 10 banks on average.
II. Mobile payments play an increasingly important role in inclusive finance
The latest World Bank report shows that 1.7 billion people worldwide still do not have access to
secure and convenient financial services. The increasing popularity of mobile payment applications
has driven inclusive finance in many emerging markets to achieve leapfrog development. Data
shows that the growth rate of financial account ownership in 31 countries in the world over the
past three years has exceeded 5%. The main driving force is the increasingly active mobile
payment transactions. And countries in Asia, Africa and Latin America have experienced the
fastest growth.
More importantly, mobile payments enable people in rural areas, poor areas, and other areas
previously excluded from the traditional financial system to enjoy more adequate financial
services and online services. On the one hand, mobile payment has helped the rural market to
penetrate financial services and accelerate the digitalization of the agricultural industry value
chain. On the other hand, mobile payment has become an important service tool to reach refugees
and the poor. According to the United Nations data, more than 135 million people worldwide still
need humanitarian assistance in 2018. In order to solve this problem more efficiently, charities
have gradually adopted digital financial services instead of physical help such as cash. A survey of
relevant countries shows that more than 55% of mobile payment institutions are working with
charitable organizations to enhance the convenience of help payments.
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Global and China Mobile Payment Industry Report, 2019-2025
III. The market value and status of mobile payment institutions continue to improve
In the process of meeting the needs of SMEs and individuals, the profitability of mobile payment
institutions has continued to increase, and their market value and status have continued to
strengthen. In 2018, the average growth rate of global mobile payment institutions’ operating
income reached 23.9%, and about 30% of institutions’ EBITDA margins exceeded 25%. More
importantly, mobile payments have evolved into a platform that connects users with services from
all walks of life. The meaning of payment goes beyond the payment itself.
IV. The regulatory requirements for mobile payments in various countries are gradually tightening
Judging from the latest development trend, the supervision of mobile payment in various countries
has become increasingly strict. For example, in June 2018, Indonesia issued new regulations to
relax the transaction limits of some mobile payment users. Meanwhile, new regulations increased
the requirements for mobile payment institutions, including a minimum capital of IDR 3 billion, no
more than 49% shares held by foreign investors, and mandatory requirement for overseas
remittance business through the national payment gateway.
Specifically, the global mobile payment industry currently faces five major regulatory changes,
namely taxes, knowing your customers (KYC), cross-border remittances, national inclusive
financial policies, and data regulation. Among them, the impact of data supervision on mobile
payment institutions is most prominent. Customer data is very important for payment institutions
to enrich their service content and improve profitability, but this process also increases the risk of
customer data leakage.
In 2018, some countries implemented more stringent anti-money laundering and customer
information protection regulations, including the introduction of data privacy regulations, focus on
data localization and data security, and emphasis on the legality of data processing and data
sharing.
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Global and China Mobile Payment Industry Report, 2019-2025
3. Chinese Mobile Payment Market
3.1 Overview
Mobile payment has spread rapidly in both first- and second-tier cities and third- and fourth-tier
cities in China, from online to offline, supermarkets to restaurants, taxis to high-speed railways,
and even snack stands as well as vegetable and night markets, being applied everywhere.
In 2018, transaction size of China’s mobile payment business reached RMB445.22trillion (mobile
payment of banks and third-party payment companies), skyrocketing by 44.53% from a year
earlier, of which banks occupied 62.3%. In 2019, the size totaled RMB589.7 trillion.
In 2019, mobile payment in China is featured as follows:
(1) Regulatory policies on provisions, anti-money laundering, etc. were introduced frequently, access to
payment license was tightened and requirements on renewal became more stringent;
(2) Mobile payment prevails across China, with market size ever expanding;
(3) Mergers and acquisitions often occur among enterprises, and it is a general trend for players to push
forward joint development;
(4) Mobile payment in transportation and the cross-border mobile payment have been the focuses of
payment firms.
(5) Wider use of biometrics comes with rapid adoption of emerging technologies like AI, big data and cloud
computing. Examples include China Minsheng Bank’s face recognition system, Bank of Communications’
self-service card issuance with face recognition, and Agricultural Bank of China’s super counter service
handled with face recognition technology.
At present, China’s mobile payment market is in severe competition. By market participant, there
are mainly five enterprise models, i.e., third party payment firm (internet), UnionPay, bank,
operator, and terminal and smartphone vendor.
Wherein, Alipay and Tenpay take a combined share of around 90% in China’s third-part payment
company (excluding banks) market.
Attracted by profit chain of mobile payment, banks and smartphone and terminal players walk into
mobile payment business and make layout in succession, which intensifies competition in China’s
mobile payment industry. Competition will speed up maturing of the industry.
3.2 Regulatory Policies
With fast growing of mobile payment, regulators in China have successively issued policies and
regulations in recent years, mainly covering industry access, security regulation and operational
guidance, for the purpose of comprehensively strengthening regulation on mobile payment
industry and helping it develop healthily and orderly.
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Global and China Mobile Payment Industry Report, 2019-2025
3.2.1 Industry Access
On June 14, 2010, People's Bank of China issued the "Management Rules for Payment Services of
Non-financial Institutions” (hereinafter referred to as the "Rules"), officially implementing
regulation on domestic third-party payment industry.
Interpretations of Regulations on the Online Payment Business of Non-Banking
Payment Institutions
Item
Content
Business
A non-financial institution to provide payment services should obtain a “payment business license”
License
to become a payment institution. A payment institution should accept the supervision and
management of People's Bank of China, and without the approval of People's Bank of China, any
non-financial institutions and individuals shall not engage in payment business or engage in
payment business in disguised forms.
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Global and China Mobile Payment Industry Report, 2019-2025
Application
September 1, 2011 is the deadline for third-party payment institutions to obtain licenses, and
Time
enterprises not obtaining licenses before the deadline shall not continue their payment business.
Duration
of
License
From the date of issuance, the “payment business license” is valid for 5 years. Payment institutions
shall file renewal applications with local branches of People’s Bank of China within six months before
the expiration.
Application
The institution to provide province-wide payment services should have registered capital of at least
Threshold
RMB 30 million; the institution to provide nationwide payment services should have registered
capital of at least RMB 100 million.
Service Scope
The payment services provided by non-financial institutions mainly include network payment,
prepaid card issuance and acceptance, bank card acceptance and other payment services
determined by People’s Bank of China.
Network payment includes currency exchange, Internet payment, mobile phone payment, fixed
telephone payment, digital television payment.
Monetary Funds
Payment institutions should operate within the business scope approved by the “payment business
Management
license”, and shall not operate the businesses beyond the approved scope, and shall not entrust
businesses to other institutions.
The transfer of monetary fund between payment institutions should be entrusted to banking
financial institutions. Payment institutions shall not store monetary funds for each other, or entrust
other payment institutions to do so. Payment institutions shall not transact the transfer of funds
between banking financial institutions.
The customer reserve accepted by a payment institution is not the property of the payment
institution, and the payment institution shall only transfer the reserve according to the payment
order issued by the customer. The payment institution shall not misappropriate the reserve in any
form. The proportion of the payment institution’s paid-in capital to the daily average balance of
customer reserve shall not be less than 10%.
Business
For the payment institutions with any one of the following circumstances, the regulatory authorities
Termination
have the right to order them to stop some or all payment business: accumulated losses exceed
50% of its paid-in capital; serious business risk; serious illegal or incompliant operation.
Source: ResearchInChina
3.2.2 Main Polices
Main Policies on Mobile Payment in China, 2011-2019
Policy
Release Date
Administrative Measures for the Payment Services Provided by Non-financial Institutions
Jun 14, 2010
Administrative Measures for Anti-Money Laundering and Anti-Terrorist Financing of Payment Institutions
Jun 1, 2011
Administrative Measures for Prepaid Payment Business of Payment Institutions (Draft for Comments)
Oct 28, 2011
Interim Measures for the Depository of Clients' Reserve of Payment Institution (Draft for Comments)
Nov 4, 2011
Administrative Measures for Internet Payment Business of Payment Institutions (Draft for Comments)
Jan 5, 2012
Administrative Measures for Bank Card Acquiring Business (Draft for Comments)
Jun 27, 2012
Single-purpose commercial Prepaid Card Management Measures (Trial)
Aug 24, 2012
Management Measures on Prepaid Card Business of Payment Institutions
Sep 17, 2012
Guidance on Pilot Cross-border E-commerce Foreign Exchange Payment Services of Payment Institutions
Mar 2013
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Global and China Mobile Payment Industry Report, 2019-2025
Policy
Release Date
Management Measures on Bank Card Acquiring Business
Jul 10, 2013
Letter of Opinions of Payment and Settlement Department of the People’s Bank of China on Suspending Alipay’s
Mar. 13, 2014
Offline Barcode (2D Barcode) Payment Business
Guiding Opinions of the People’s Bank of China on the Development of Smartphone Payment Business
Mar. 19, 2014
Notice of China Banking Regulatory Commission and the People’s Bank of China on Strengthening the Management
Apr. 2014
of Cooperative Business of Commercial Banks and Third-party Payment Companies
Notice of the General Office of the People's Bank of China on Matters Concerning Gradually Prohibiting the Fallback
May 14, 2014
Transactions on Financial IC Cards
Several Opinions on Promoting the Healthy Development of Domestic Trade Circulation
Nov. 16, 2014
Notice of the General Office of the People's Bank of China on Key Points of Payment and Settlement Work in 2015
Feb. 2, 2015
Administrative Measures for Online Payment Business
2015
Decision of the State Council on Implementing Access Administration of Bank Card Clearing Institutions
Apr. 2015
Notice of the People's Bank of China on Renewal of ‘Payment Business Permit
Nov. 2015
Administrative Measures for Network Payment Business of Non-banking Payment Institutions Issued by the People's
Dec. 2015
Bank of China
Implementation Measures for Risk Assessment of Non-banking Payment Institutions
Feb. 2016
Notice on Improving the Pricing Mechanism for the Fee Charges for the Use of Bankcards
Mar. 2016
Implementation Plan for Specific Work on Risk Rectification of Non-banking Payment Institutions
Apr. 2016
Rules for Barcode Payment Business (Exposure Draft)
Jul. 2016
Rules for Entry in Terminal Business of Bank Card Acceptance
Aug. 2016
The Circular of the General Office of the People’s Bank of China on Enforcing the Centralized Deposit of Clients’
Reserves of Payment Institutions
Measures on the Administration and Due Diligence Procedures for Non-Residents’ Financial Accounts Information
Relating to Tax Matters
PBC’s Circular on the Follow-up Control Measures for Enhancing Management on Account Openings and Suspicious
Transaction Reports
PBC Payment & Settlement Department’s Circular on the Transfer of Non-banking Payment Institutions’ Online
Payment Business from Direct Mode to the Unified Platform of China Nets Union Clearing Corporation
The Opinions of the General Office of the State Council on Perfecting the Supervision System for Anti-Money
Laundering, Anti-terrorism Financing and Anti-tax Evasion
The Circular on Further Regulating Payment Business without a License (issued by General Office of the People’s
Bank of China [2017] No.217 Document)
Jan 2017
May 2017
May 2017
Aug 2017
Sept 2017
Nov 2017
Barcode Payment Business Criterions (Trial)
De 2017
PBC’s Circular on Regulating Innovative Payment Business
Dec 2017
The Circular of the General Office of the People’s Bank of China on Adjusting the Centralized Deposit Ratios of
Clients’ Reserves of Payment Institutions (issued by General Office of the People’s Bank of China [2017] No.248
Dec 2017
Document)
The Notice on Documents on Investigating Bank Account-related Payment Business Needs from Non-bank Payment
Institutions requires access of payment institutions and banks to connected platform.
The Notice on Funds Settlement Pilot through Centralized Accounts for Custody of Clients' Reserves of Payment
Institutions indicates that centralized reserves custody accounts for settlement of all payment funds should be
33
Jan 2018
May 2018
Global and China Mobile Payment Industry Report, 2019-2025
Policy
Release Date
issued directly by authorities under the People’s Bank of China.
The Notice of the General Executive Office of the People's Bank of China on Issues on Centralized Custody of Clients'
Reserves of Payment Institutions requires that share of clients' reserves for centralized custody should be increased
Jun 2018
month by month from July 9, 2018 to 100% on January 14, 2019.
The Notice on Revocation of RMB Clients' Reserves Accounts of Payment Institutions requires that payment
institutions should revoke their RMB clients' reserves accounts opened by reserves banks before January 14, 2019.
The Guiding Opinions on Rural Revitalization through Financial Services requires that rural financial services should
be encouraged for wide use of mobile payment in rural areas by 2020.
Dec 2018
Jan 2019
The Outline of Digital Village Development Strategy requires that new rural inclusive finance services should be
developed and development environment for these services such as online payment, mobile payment and online
May 2019
credit should be improved, thereby providing convenient financial services for peasants.
Source: The People's Bank of China; ResearchInChina
3.2.3 Payment License
Till the end of 2017, the number of non-banking payment institutions in China was reduced from
271 to 247 (only 48 ones with mobile payment license) due to license cancellations, combined
renewals and no grants for license renewal.
In recent two years, issuance of the license was gradually tightened, shown as follows:
(1) Year-by-year reduction even suspension in number of the license issued. In 2015, only one license was
newly added; after July 2015, the People's Bank of China issued no new license, and revoked the license of
payment institutions which failed to meet regulatory requirements.
(2) Stricter requirements on renewal of license. License of 27 companies which were approved in 2011,
expired in May 2016, but it was until August that the People’s Bank of China completed renewal of their
licenses. Moreover, businesses of some payment institutions were adjusted, due to serious violation of
regulations in business, business stagnation and shrinking or unsolicited application for termination of
business. PBC reduced their business scope in the renewal. Nevertheless, part of payment institutions applied
for new businesses and were approved. In the future, PBC will have a stricter control on the renewal and
review of the payment license, in line with the principle of “issuance control, structure optimization, quality
improvement and orderly development”. So far, the People’s Bank of China has cancelled 24 third-party
payment licenses, of which 19 were withdrawn in 2017 (9 third-party payment firms were deprived of
renewal because of violations, and 10 ones were cancelled due to business combination.
(3) Classified regulation for payment institutions. The file PBC issued in April 2016, suggested that payment
institutions should be divided into five categories(A,B,C,D,E) in 11 grades for classified regulation, according
to the 6 rating indexes, namely, custody of clients’ reserves, compliance and risk control, protection of
customer rights, system security, measures for anti-money laundering, and sustainability of development.
34
Global and China Mobile Payment Industry Report, 2019-2025
Classification of Third-party Payment Licenses and Regulators
Source: ResearchInChina
By the end of 2019, there had been 237 companies issued payment licenses and 34 institutions
canceled in China. Different types (381 in total) of licenses were issued to the 237 third-party
payment institutions, among which 140 companies were licensed to issue and accept prepaid
cards, making such license the most issued.
Number of Payment Licenses Issued to Non-Banking Institutions in China, 2015-2019
101
96
53
19
2011
2012
2013
2014
2
0
0
2015
2016
2017
Year
2015
2016
2017
2018
2019
Number
1
30
58
83
65
Source: The People’s Bank of China; ResearchInChina
35
Global and China Mobile Payment Industry Report, 2019-2025
Number of Payment Licenses Issued in China by Type by the End of 2019
Prepaid Card Issuance
1
Prepaid Card Acceptance
6
Digital TV Payment
6
Fixed Telephone Payment
8
Mobile phone Payment
48
Bankcard Acquiring Service
62
Internet Payment
110
Accepting and Issuing Prepaid Cards
140
0
20
40
60
80
100
120
140
160
Quantity
Accepting and Issuing Prepaid Cards
140
Internet Payment
110
Bankcard Acquiring Service
62
Mobile phone Payment
48
Fixed Telephone Payment
8
Digital TV Payment
6
Prepaid Card Acceptance
6
Prepaid Card Issuance
1
Source: The People’s Bank of China; ResearchInChina
Enterprises Having been Cancelled Payment Business License by the End of 2019
License No.
Company Name
Date
of
Payment
License Cancelled
1
Z2006633000011
Zhejiang Yishi Enterprise Management Service Co., Ltd. (mpaym)
Aug 24, 2015
2
Z2007044000012
Guangdong Yimin Tourism & Leisure Service Co., Ltd.
Oct 8, 2015
3
Z2003731000019
Shanghai Chang-go Enterprise Service Co., Ltd.
Jan 5, 2016
4
Z2016311000019
Beijing Runjing Search Investment Co., Ltd.
Oct 20, 2016
5
Z2004031000014
Shanghai Fuiou Financial Network Technology Co., Ltd.
May 15, 2017
6
Z2007331000014
Worthtech Co., Ltd.
May 15, 2017
7
Z2007511000016
Property & Credit Network Payment Co., Ltd.
May 15, 2017
8
Z2008531000010
Shanghai Fufeitong Enterprise Service Co., Ltd.
May 15, 2017
9
Z2017733000017
Zhejiang SHENGJU Payment Technology Co., Ltd.
May 15, 2017
10
Z2024137000015
Etone Pay Co., Ltd.
May 15, 2017
11
Z2001731000013
Sand E-Commerce Service Co., Ltd.(SandPay)
Jun 6, 2017
12
Z2009031000013
All In Pay Commerce Service Co., Ltd.
Jun 6, 2017
36
Global and China Mobile Payment Industry Report, 2019-2025
13
Z2022333000011
Wenzhou Zhimin Information Service Co., Ltd.
Jun 23, 2017
14
Z2009231000011
Shanghai Tonkpay Investment Management Co., Ltd.
Dec 20, 2016
15
Z2013731000018
Potevio Yintong Payment Co., Ltd. (Polypay)
Jun 26, 2017
16
Z2015261000011
010PAY.CN
Jun 26, 2017
17
Z2016011000012
Beijing Jiaoguang Technology Development Co., Ltd.
Jun 26, 2012
18
Z2016511000017
Beijing All Credit Payment Co., Ltd.
Jun 26, 2017
19
Z2017414000013
Shanxi Lanhua Pay Co., Ltd.
Jun 26, 2017
20
Z2017623000010
Harbin Jinlianxin Payment Technology Co., Ltd.
Jun 26, 2017
21
Z2018634000015
Anhui Rishine Information Service Co., Ltd. (Rishine Pay)
Jun 26, 2017
22
Z2018943000011
Changsha Shanglian E-commerce Co., Ltd.
Jun 26, 2017
23
Z2019353000012
Lefu Pay Co., Ltd.
Jun 26, 2017
24
Z2019146000014
Hainan Island Cards Payment Network Co., Ltd.
Jun 26, 2017
25
Z2019943000019
Hunan Caixin Jintong Ecommerce Co., Ltd.
Jan.5, 2018
26
Z2020031000010
Shanghai Qianyue Enterprise Management Co., Ltd.
Jan.5, 2018
27
Z2021343000011
Changsha Starlink Business Service Co., Ltd.
Jan.5, 2018
28
Z2021134000014
Hefei Xinsiwei Business Management Co., Ltd.
Jan.5, 2018
29
Z2022811000012
Beijing Zhonghuijin Payment Service Co., Ltd.
Jul.6, 2018
30
Z2023111000017
Beijing Guohua Huiyin Technology Co., Ltd.
Jul.6, 2018
31
Z2023734000014
Anhui Changrun Payment Business Co., Ltd.
Jul.6, 2018
32
Z2024311000013
Use-Pay Payment Technology Co., Ltd.
Jul.6, 2018
33
Z2025042000016
Hubei Lantianxing Payment Co., Ltd.
Jul.6, 2018
34
Z2025265000016
Xinjiang Card Business Service Co., Ltd.
Jul.10, 2019
Source: The People’s Bank of China; ResearchInChina
Enterprises Having Obtained Payment Business License by the End of 2019
License No.
Company Name
Date of Issue
Z2000133000019
Alipay Network Technology Co., Ltd.
Jan.6, 2018
Z2000231000010
China UnionPay Merchant Services Co., Ltd.
Jan.6, 2018
Z2000311000013
Property & Credit Electronic Payment Co., Ltd.
May 3, 2016
Z2000444000013
Tenpay Technology Limited
Jun.26, 2018
Z2000531000017
Allinpay Network Service Co., Ltd.
Jun.26, 2018
Z2000611000010
OpenUnion Network Technology Service Co., Ltd.
Jun.13, 2019
Z2000711000019
YeePay.com
Jan.6, 2018
Z2000831000014
Kuaiqian Payment and Settlement Information Co., Ltd (99Bill)
May 15, 2017
Z2000931000013
PnR Data Service Co., Ltd.
Aug.30, 2017
Z2001031000010
ShengPay Electronic Payment Services Co., Ltd.
Jun.13, 2019
Z2001111000013
Beijing Qiandaibao Payment Technology Ltd.
Jun.13, 2019
Z2001231000018
Orient Electronic Payment Co.,Ltd
May 15, 2017
37
Global and China Mobile Payment Industry Report, 2019-2025
License No.
Company Name
Date of Issue
Z2001344000012
Shenzhen LycheePay Financial Network Technology Service Co., Ltd.
May 3, 2016
Z2001444000011
Guangzhou UnionPay Network Payment Co., Ltd
May 15, 2017
Z2001511000019
Beijing Digital Wangfujing Technology Ltd.
Jun.26, 2018
Z2001611000018
Beijing Unionpay Merchant Services Co.,Ltd
Jan.6, 2018
Z2001811000016
YuFu Payment Co., Ltd.
Jun..23, 2017
Z2001912000014
EASY PAY Co. Ltd.
May 15, 2017
Z2002044000013
Shenzhen Yinsheng E-pay Co., Ltd.
Jun.26, 2018
Z2002131000017
International Payment Solutions Limited (IPS)
May 3, 2016
Z2002211000010
Chinabank Payments (BeiJing) Technology Co., Ltd.
Aug.30, 2017
Z2002346000018
Hainan NewPay Information Technology Co., Ltd.
Jun.13, 2019
Z2002431000014
PingAnPay Electronic Payment Co., Ltd.
May 3, 2016
Z2002511000017
Lakala Payment Co., Ltd.
Jun.13, 2019
Z2002631000012
Shanghai FFT Information Service Co., Ltd.
May 15, 2017
Z2002744000016
PingAnPay Technology Service Co., Ltd.
Jan.6, 2018
Z2002831000010
Shanghai ChinaPay e-Payment Service Co., Ltd.
Aug.29, 2016
Z2002933000017
Lianlian Yintong Electronic Payment Co., Ltd.(LianLianPay)
Jul.10, 2019
Z2003011000010
Union Mobile Pay Co. Ltd. ("UMP")
Jan.6, 2018
Z2003151000010
Chengdu MOBO Network Technology Co., Ltd.
Jan.6, 2018
Z2003215000014
JieFuRuiTong Co., Ltd.
Dec.27, 2019
Z2003352000017
Zhenglian Payment Co., Ltd.
May 15, 2017
Z2003431000012
Shanghai Day's Services Co., Ltd.
Aug.29, 2016
Z2003537000015
Shandong City Card Payment Co., Ltd.
Jun.13, 2019
Z2003615000010
ZhongFuTong Information Service Co., Ltd.
Aug.29, 2016
Z2003851000013
Sichuan Business Easy Co., Ltd.
Aug.29, 2016
Z2003932000016
Nanjing Citizen Card Co., Ltd.
Jun.13, 2019
Z2004111000017
Bestpay Co. Ltd.
Dec.22, 2016
Z2004211000016
UniPay Co., Ltd.
Jun.26, 2018
Z2004343000017
E-Commerce Company of China Mobile
Jan.6, 2018
Z2004431000010
Shanghai LiveByTouch Information Technology Co., Ltd.
Jun.26, 2018
Z2004512000012
Tianjin Metropolitan Card Co., Ltd.
Jul.10, 2019
Z2004632000017
Jiangsu Ruixiang Business Co., Ltd.
Dec.27, 2019
Z2004742000014
Wuhan JinYuanXin Enterprise Service Information System Co., Ltd.
Dec.22, 2016
Z2004844000011
Guangdong YinJieTong Electronic Payment and Settlement Co., Ltd.
Dec.27, 2019
Z2004951000010
Modern Financial Holdings (Chengdu)
Jul.10, 2019
Z2005011000015
Gopay Information Technology Company Limited
Dec.22, 2016
Z2005150000016
Chongqing YijiPay Technology Co., Ltd.
Dec.22, 2016
Z2005213000011
Hebei City Card Electronic Payment Service Co., Ltd.
Dec.22, 2016
Z2005314000019
Shanxi One Card Solutions Co., Ltd.
Jun.26, 2018
Z2005423000017
Harbin HuaTong Pay Network Technology Co., Ltd.
Dec.22, 2016
Z2005533000014
Sunmen E-Commerce Corporation
Dec.27, 2019
38
Global and China Mobile Payment Industry Report, 2019-2025
License No.
Company Name
Date of Issue
Z2005634000012
Anhui HuaXiaTong Payment Co., Ltd.
Jun.26, 2018
Z2005741000012
Henan HuiYinfeng Information Technology Co., Ltd.
Dec.27, 2019
Z2005852000017
Guizhou Huiliantong E-Business Co.,Ltd.
Dec.22, 2016
Z2005921000014
H & I INFO Co.,Ltd
Dec.22, 2016
Z2006033000017
Ningbo Unionpay Merchant Services Co., Ltd.
May 15, 2017
Z2006135000014
Xiamen Ecard Co., Ltd.
Dec.22, 2016
Z2006244000012
Shenzhen Globebill Technology Co., Ltd.
Jun.13, 2019
Z2006331000016
E-banking Information of China
Jun.26, 2018
Z2006444000010
Easylink Payment Co. Ltd.
Jun.13, 2019
Z2006511000018
Beijing Haike Financing Payment Service Co., Ltd.
Dec.27, 2019
Z2006735000018
CUC Payment (Fujian) Co., Ltd.
Jan.6, 2018
Z2006844000016
Shenzhen TFTPay Co., Ltd.
Dec.22, 2016
Z2006931000010
EasternPay
Jun.13, 2019
Z2007111000010
PayEase Technology (Beijing) Ltd.
Jun.13, 2019
Z2007244000010
Shenzhen Taihai Network Service Co., Ltd.
Z2007444000018
ePayLinks Technology Co., Ltd.
Jun.13, 2019
Z2007644000016
eBank Union (Payfree) Co., Ltd.
Jun.13, 2019
Z2007731000010
UNSPAY.com
Dec.22, 2016
Z2007844000014
Shenzhen Unionpay Financial Network Co., Ltd.
Dec.22, 2016
Z2007931000018
BAOFOO.com
Dec.22, 2016
Z2008031000015
De1pos.com
Jul.16, 2018
Z2008111000018
China Payment & Clearing Network Co., Ltd.
Dec.22, 2016
Z2008231000013
Shanghai Fuion Payment Service Co., Ltd.
Jan.6, 2018
Z2008311000016
Raytong E-commerce Co., Ltd.
Jun.23, 2017
Z2008411000015
Beijing Ainong Inn Technology Service Co., Ltd.
Jan.6, 2018
Z2008611000013
ud-buy.com
Jun.26, 2018
Z2008711000012
joiest.com
Dec.22, 2016
Z2008831000017
Shanghai City Tour Card Development Co., Ltd.
Jun.13, 2019
Z2008911000010
bmac.com.cn
Jan.6, 2018
Z2009111000016
Space-time information exchange Yaku Beijing Technology Co., Ltd
Jul.10, 2019
Z2009311000014
Zhongtou Kexin Technology Co., Ltd.
Nov.12, 2018
Z2009431000019
Shanghai Yiyou Enterprise Service Co.,Ltd
Dec.22, 2016
Z2009531000018
Safepass.cn
Dec.22, 2016
Z2009631000017
chblt.com
Dec.22, 2016
Z2009731000016
Shanghai NewStar Technology Co., Ltd.
Dec.27, 2019
Z2009831000015
Jinjiang International Commerce Co., Ltd.
Dec.22, 2016
Z2009931000014
360sct.com
Dec.22, 2016
Z2010031000011
Dazhong Transportation (Group) Co., Ltd.
Nov.12, 2018
Z2010131000010
sandpay.com.cn
Jun.6, 2017
Z2010231000019
cardinfo.com.cn
Jul.16, 2018
39
Dec.22, 2016
Global and China Mobile Payment Industry Report, 2019-2025
License No.
Company Name
Date of Issue
Z2010331000018
ECPSS
Jun.27, 2017
Z2010431000017
Shanghai Handpay Information Technology Co., Ltd.
Jun.27, 2017
Z2010531000016
China TV Pay
Jun.27, 2017
Z2010631000015
Shanghai Oriental Information Technology Service Co., Ltd.
Jun.27, 2017
Z2010712000017
Tianjin Reapal Network Co., Ltd.
Dec.27, 2019
Z2010832000012
Nanjing Suning Yifubao Network Technology Co., Ltd.
Jul.10, 2019
Z2010932000011
95epay.com
Jan.6, 2018
Z2011037000013
Shandong E-commerce Integrated Operation Management Co., Ltd.
Jun.27, 2017
Z2011144000013
Shenzhen ShenZhouTongFu Co. Ltd
Jun.27, 2017
Z2011244000012
JLPAY
Dec.27, 2019
Z2011344000011
Shenzhen KuaiHuiBao Information Technology Co., Ltd.
Jun.27, 2017
Z2011411000019
19PAY
Jun.27, 2017
Z2011511000018
Sumapay
Jun.27, 2017
Z2011611000017
Huiyuan Yintong (Beijing) Online Payment Technology Co., Ltd.
Jul.10, 2019
Z2011711000016
www.vbill.cn
Jun.27, 2017
Z2011833000019
ay.163.com
Jun.13, 2019
Z2011933000018
ebatong.com
Jun.27, 2017
Z2012033000015
Zhejiang Aerospace Electronic Information Industry Co., Ltd.
Jun.27, 2017
Z2012133000014
yoyipay.com
Jun.27, 2017
Z2012235000011
fjpostar.com
Jun.27, 2016
Z2012343000010
kingpass.cn
Dec.27, 2019
Z2012445000017
jftzf.com
Jun.13, 2019
Z2012565000011
Xinjiang Runwu Network Co., Ltd.
Jun.27, 2017
Z2012632000010
jsca.com.cn
Jun.27, 2017
Z2012737000014
Shandong Gain Alliance Network Technology Co.,Ltd.
Jun.13, 2019
Z2012831000019
yoolink.com
Jun.27, 2017
Z2012931000018
orientpay.com
Jun.27, 2017
Z2013031000015
Shanghai XinHua Media Co., Ltd.
Jun.27, 2017
Z2013131000014
Shanghai Commercial High-tech Development Co., Ltd.
Jun.27, 2017
Z2013231000013
hapay.cn
Jun.27, 2017
Z2013331000012
hcallpay.com
Jun.27, 2017
Z2013431000011
g-pay.cn
Jun.27, 2017
Z2013531000010
961961.com
Jun.27, 2017
Z2013631000019
Shanghai Runtog Industrial Investment Co., Ltd.
Jun.27, 2017
Z2013831000017
jg365.cn
Jun.26, 2018
Z2013931000016
cnredcard.com
Jun.27, 2017
Z2014032000012
Jiangsu AiXinn Consumer Payment Service Co., Ltd.
Jun.27, 2017
Z2014132000011
Jiangsu Popular Bookmall Business Service Co.,
Jun.27, 2017
Z2014232000010
WANSPAY (wanspay.com)
Jun.26, 2018
Z2014332000019
Jiangsu Hongxingda Postal Business Information Co., Ltd.
Jun.27, 2017
40
Global and China Mobile Payment Industry Report, 2019-2025
License No.
Company Name
Date of Issue
Z2014432000018
Jiangsu Lvtong Business Co., Ltd.
Jan.6, 2018
Z2014532000017
Wuxi Citizen Card Co., Ltd.
Jun.27, 2017
Z2014632000016
Suzhou Citizen Card Co., Ltd.
Z2014737000010
Union City SD
Jun.27, 2017
Z2014851000010
Chengdu TianFuTong Financial Service Co., Ltd.
Dec.27, 2019
Z2014944000019
Express Pay (expresspay.cn)
Jun.27, 2017
Z2015044000015
China Payment (qtopay.cn)
Jun.27, 2017
Z2015144000014
BIZ LINKS (slsy.com)
Jul.6, 2018
Z2015361000010
easy-pass.cn
Jun.13, 2019
Z2015461000019
96185.cn
Jun.27, 2017
Z2015511000019
Beijing HengXinTong Telecommunication Service Co., Ltd.
Jun.27, 2017
Z2015611000018
HRT Payment (hecard.com.cn)
Nov.12, 2018
Z2015711000017
ALLSCORE (allscore.com)
Jun.27, 2017
Z2015811000016
Yintong Card (yintongkaxinyue.com.cn)
Jun.26, 2018
Z2015911000015
Beijing Yintong Payment Co., Ltd.
Nov.12, 2018
Z2016111000011
Beijing HuaRuiFuDa Technology Co., Ltd.
Nov.12, 2018
Z2016211000010
Beijing GaoHuiTong Commercial Management Co., Ltd.
Jun.27, 2017
Z2016411000018
YinXinLian (Beijing) Business Service Co., Ltd.
Jun.26, 2018
Z2016611000016
Beijing GuangJuFu Payment Co., Ltd.
Jun.27, 2017
Z2016711000015
Beijing Shangyin Technology Co., Ltd.
Nov.12, 2018
Z2016811000014
Guolv (Beijing) Information Technology Co., Ltd.
Jun.27, 2017
Z2016950000015
Chengdu City Union Card Payment Co., Ltd.
Jun.27, 2017
Z2017050000012
Chongqing UBLIC E-CARD Co., Ltd.
Jun.27, 2017
Z2017150000011
Chongqing QianLi Technology Co., Ltd.
Jun.13, 2019
Z2017213000016
Yujia Pay Co., Ltd.
Jun.27, 2017
Z2017314000014
elinkDATA, Inc.
Jun.26, 2018
Z2017522000012
Jilintong Card Payment Co., Ltd. (jilintong.com)
Jun.27, 2017
Z2017833000016
Zhoushan Mingseng Merchants Sci&Tech Service Co., Ltd.
Jun.27, 2017
Z2017933000015
Zhejiang YinFuTong Information Technology Co., Ltd.
Jun.27, 2017
Z2018035000010
Fujian Card Network Co., Ltd. (fjykt.com)
Jun.13, 2019
Z2018135000019
Fujian ZhangCaiTong Payment Service Co., Ltd.
Dec.27, 2019
Z2018235000018
Fujian Red Commercial Payment Co., Ltd. (redpass.com.cn)
Jan.6, 2018
Z2018335000017
Xiamen Xiangyu Payment Co., Ltd.
Jun.26, 2018
Z2018434000017
Anhui Wastone Sci&Tech Information Co., Ltd.
Jan.6, 2018
Z2018534000016
Shengde Tiankai Information Technology Co., Ltd.
Nov.12, 2018
Z2018736000012
Anhui JiaoFeiTong Information Technology Co., Ltd. (JFT.net.cn)
Jun.26, 2018
Z2018843000012
Hunan Xingguang Media Co., Ltd.
Jun.27, 2017
Z2019045000016
Guangxi FuFeiTong Business Service Co., Ltd.
Nov.12, 2018
Z2019253000013
Kunming Kahuka Payment Technology Co., Ltd.
Jan.6, 2018
Z2019453000011
Yunnan Neoby Payment Management Co., Ltd.
Jun.27, 2017
Jan.6, 2018
41
Global and China Mobile Payment Industry Report, 2019-2025
License No.
Company Name
Date of Issue
Z2019562000019
Lanzhou Yijia Wantong Enterprise Service Co., Ltd.
Jun.13, 2019
Z2019637000010
Qingdao Bestone Payment Co., Ltd.
Jun.13, 2019
Z2019737000019
Qingdao Buytop Payment Service Co., Ltd.
Dec.27, 2019
Z2019831000014
Guangdog Huika Commercial Service Co. Ltd. (unionwebpay.com)
Jan.6, 2018
Z2020112000012
CNEPAY.com
Jan.6, 2018
Z2020221000010
Liaoning Xintian Digital Technology Co., Ltd.
Jan.6, 2018
Z2020332000016
Jiangsu Flying Commerce Intelligent Technology Co., Ltd.
Jan.6, 2018
Z2020437000010
Shandong Gaosu Xinlian Payment Co., Ltd. (etcsd.com)
Jan.6, 2018
Z2020542000012
Zon100 E-Payment Service Co., Ltd. (zon100.com)
Jan.6, 2018
Z2020651000019
Chengdu PayExpress New Information Technology Service Co., Ltd.
Jan.6, 2018
Z2020761000016
Shaanxi Coal Extraction Center Co., Ltd.
Jan.6, 2018
Z2020811000016
Beijing Yake Technology Development Co., Ltd.
Jul.10, 2019
Z2020913000013
Hebei Beiren Jitong Payment Service Co., Ltd.
Jan.6, 2018
Z2021033000016
Hangzhou Citizen Card Co., Ltd.
Jan.6, 2018
Z2021241000014
Zhengzhou Jianye Zhizun Commercial Service Co., Ltd.
Jan.6, 2018
Z2021452000018
Guizhou Guijin Pay Network Service Co., Ltd.
Jan.6, 2018
Z2021537000017
Shandong Yinli Enterprise Service Co., Ltd.
Jan.6, 2018
Z2021631000012
Shanghai ShangLvTong Business Service Co., Ltd.
Jan.6, 2018
Z2021732000010
Jiangsu DHA Pay Commercial Service Co., Ltd.
Jan.6, 2018
Z2021832000019
Jiangsu Jinxi Smart Card Management Co., Ltd.
Jan.6, 2018
Z2021911000013
Bailian Youli (Beijing) Investment Limited Company
Jan.6, 2018
Z2022011000010
EBC (Easy Bonus Card) Payment Co., Ltd.
Dec.27, 2019
Z2022111000019
Beijing Quanshuntong Trade Co., Ltd. (okall.com.cn)
Jan.6, 2018
Z2022211000018
Beijng Hengda Wanhua Payment Co., Ltd.
Jan.6, 2018
Z2022435000018
Xiamen SeaShine E-Commerce Co., Ltd.
Nov.12, 2018
Z2022534000018
Anhui Wanen Commercial Investment Service Co., Ltd.
Jul.6, 2018
Z2022653000013
Yunnan YingTongPay Management Co., Ltd.
Jul.6, 2018
Z2022711000013
Beijing BaifuBao Technology Co., Ltd.
Dec.27, 2019
Z2022932000016
Edenred China
Jul.6, 2018
Z2023014000015
Shanxi Jinhu Information Technology Co., Ltd.
Jul.6, 2018
Z2023211000016
Beijing Fanxing Shangu Information Technology Co., Ltd.
Jul.6, 2018
Z2023334000018
Ningguo Baijiahui Investment and Management Co., Ltd.
Jul.6, 2018
Z2023433000018
Hangzhou Tongce Club Integrated Service Co., Ltd.
Jul.6, 2018
Z2023531000019
Shanghai Sodexo Pass Service, Ltd.
Jun.13, 2019
Z2023661000011
Yulin Yuanheng Business Management Co., Ltd.
Jul.6, 2018
Z2023835000012
Fujian YinTong Business Service Co., Ltd.
Jul.6, 2018
Z2023923000015
Heilongjiang Shengya Science & Technology Development Co., Ltd.
Jul.6, 2018
Z2024044000017
Guangdong Xinhui E-Commerce Co., Ltd.
Nov.12, 2018
Z2024244000015
Brother Gao Deng Technology Co., Ltd.
Jul.6, 2018
Z2024411000012
Beijing SinaPay Technology Co., Ltd.
Nov.12, 2018
42
Global and China Mobile Payment Industry Report, 2019-2025
License No.
Company Name
Date of Issue
Z2024543000013
Henan Yinhe Jingu Business Service Co., Ltd.
Jul.6, 2018
Z2024642000013
Wuhan Tong Co., Ltd.
Jun.13, 2019
Z2024733000013
kjtpay.com
Jul.6, 2018
Z2024821000016
UCFPay.com
Jun.13, 2019
Z2024936000018
Huiming Business & Trading Co., Ltd.
Ju.6, 2018
Z2025161000011
Chang’an Card Co., Ltd.
Jul.10, 2019
Z2025337000010
Shandong Yunda E-commerce Co., Ltd.
Jul.10, 2019
Z2025444000010
Shenzhen RuiYinXin Information Technology Co., Ltd.
Jul.10, 2019
Z2025550000010
Chongqing Liantongfu Network Settlement Science & Technology Co., Ltd.
Jul.10, 2019
Z2025642000010
Wuhan HeZhongYiBao Technology Co., Ltd.
Jul.10, 2019
Z2025744000017
Shenzhen Guocaipay Technology Co., Ltd.
Jun.26, 2018
Z2025844000016
Guangzhou Shangwutong Network Technology Co., Ltd.
Jul.10, 2019
Z2025944000015
Joinpay.com
Jul.10, 2019
Z2026044000012
Guangzhou Helibao Payment Technology Co., Ltd.
Jul.10, 2019
Z2026145000010
Beihai Shiji Information Technology Co., Ltd.
Jul.10, 2019
Z2026244000010
Yeahka.com
Jul.10, 2019
Z2026344000019
Shenzhen Sharelink Network Co., Ltd.
Jul.10, 2019
Z2026437000017
Jinyuntong Network Payment Co., Ltd.
Jul.10, 2019
Z2026511000016
8f8.com
Jul.10, 2019
Z2026637000015
Shandong Flying Intelligent Technology Co., Ltd.
Jul.10, 2019
Z2026711000014
ehomepay.com
Jul.10, 2019
Z2026811000013
Beijing Chanpay Technology Co., Ltd.
Jul.10, 2019
Z2026944000013
Guangdong Shengdijia e-Commerce Co., Ltd.
Jul.10, 2019
Z2027044000010
Guangdong Guangwu E-Commerce Co., Ltd.
Mar.26, 2015
Z2027133000012
Transfer Pay Co., Ltd.
Jul.10, 2019
Source: The People’s Bank of China; ResearchInChina
3.3 Market Size
In China, mobile payment market growth has fallen and leveled out since its peak in 2015. In 2018,
a total of 532.814 billion mobile payment deals were done in China and transaction amount hit
RMB445.22 trillion, soaring by 92.48% and 44.53% on the previous year, separately. It is
predicted that China’s mobile payment transaction amount will sustain growth between 2019 and
2025, expectedly at a CAGR of 20.1%.
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Global and China Mobile Payment Industry Report, 2019-2025
Chinese Mobile Payment Market Size, 2015-2025E
2015
2016
2017
2018
2019E
2020E
2021E
2022E
2023E
2024E
2025E
Transaction Size (RMB trillion)
130.18
208.56
308.04
445.22
589.7
747.5
926.8
1140.2
1374.0
1580.2
1769.1
YOY Growth
322.3%
60.2%
47.7%
44.5%
32.5%
26.8%
24.0%
23.0%
20.5%
15.0%
12.0%
Source: Payment & Clearing Association of China; ResearchInChina
3.4 Market Structure
The rising share of third-party payment, a result of third-party payment industry boom, was
squeezing that of mobile banking and reached up to 37.7% in 2018. On one estimate, third-party
payment will account for more of the market than mobile banking in 2022, with share hopefully up
to 54.8% in 2025.
Chinese Mobile Payment Market Structure, 2015-2025E
44
Global and China Mobile Payment Industry Report, 2019-2025
2015
2016
2017
2018
2019E
2020E
2021E
2022E
2023E
2024E
2025E
Mobile Banking
83.1%
75.5%
65.9%
62.3%
57.7%
55.4%
52.2%
48.9%
46.2%
45.4%
45.2%
Third-party Mobile Payment
16.9%
24.5%
34.1%
37.7%
42.3%
44.6%
47.8%
51.1%
53.8%
54.6%
54.8%
Source: ResearchInChina
3.5 Enterprise Pattern
At present, Chinese mobile payment market is still in the stage of crowded competition. By market
participants, there are five operating modes dominated by third-party payment, China UnionPay,
banks and other financial institutions, operators and terminal mobile phone vendors respectively.
The huge interest chain of the mobile payment industry has attracted banks, intelligent terminal
companies and other enterprises to make layout. Apple, Samsung and ZTE have launched Apple
Pay, Samsung Pay, ZTE Pay and other mobile payment services, and all of them signed cooperation
agreements with China UnionPay.
As for third-party mobile payment (payment institutions except banks), the Chinese market sees
an obvious oligopoly effect. In recent years, Alipay and TenPay have monopolized the mobile
payment market, with nearly 90% market share. As China UnionPay, banks and mobile phone
vendors step up the layout, the competition pricks up, the market share of Alipay and TenPay
declines, but no one can challenge the status of the two giants now.
In addition, traditional enterprises also expect to get a slice of the cake. Some of the well-funded
enterprises conduct layout through the acquisition of payment licenses and other means.
PayPal, a NASDAQ listed company, plays a leading role in global third-party payment market, with
presences in more than 200 countries and regions and over 286 million active payment accounts,
allowing for trade of more than 100 currencies.
Major Operating Models and Participants of Mobile Payment in China, 2019
Leader
Main
Products
Status Quo
Quick Pass;
On December 12, 2015, Quick Pass was officially
China
opened. Users need use NFC-enabled mobile
UnionPay
bank APPs to generate virtual China UnionPay
Wallet;
cards
Wearable
Pass"-tagged POS.
payment
UnionPay Wallet mainly provides discounts,
products
integral business, mobile payment and other
Participants
China
UnionPay
China UnionPay
for
the
payment
via
offline
"Quick
services for cardholders;
QR code payment business officially commenced
on December 12, 2016;
it joined hands with over 40 banks to issue QR
code payment product in May 2017 and JD.com
45
Global and China Mobile Payment Industry Report, 2019-2025
Leader
Main
Products
Status Quo
Participants
became the first third-payment institutions
joining; an epoch-making innovative product
appeared on the Chinese NFC market in Jul
2017- JD QuickPay, a product co-launched by JD
Finance and China UnionPay; it, together with
commercial banks and payment institutions,
jointly launched unified “Cloud QuickPass” APP
with unified interface standard, unified user ID
and unified user experience on Dec 11, 2017.
Banks
Industrial
and
Commercial
Internet
other
and
Mobile
The layout of mobile banks began in 2012. The
Banks
year 2017 witnessed a boom in mobile payment
Bank of China,
in banking system. Banks, represented by ICBC,
China
launched own QR code payment products and
Construction
heavily subsidized offline payment; cooperation
Bank,
China
between banks and Internet institutions became
Merchants Bank,
increasingly popular in the second half of 2017,
China Minsheng
covering mainly fintech, Internet finance, cloud
Bank, etc.
computing and payment.
Alibaba, Tencent
Alipay;
Alipay and WeChat mainly master the market
and others
TenPay
quickly by QR code payment, red envelopes and
third-party
other means. At present, Alipay and TenPay
companies
account for about 90% of China's third-party
mobile payment market
Operators
China
Mobile,
China
Telecom,
China Unicom
SMS
China Mobile, China Telecom and China Unicom
Payment;
use NFC to carry out offline near-field payment.
NFC Mobile
“Hebao”, China Mobile’a cellphone wallet, now
Payment;
has
Wo Pay;
transactions of at least RMB1,000 billion in 2016.
Best Pay
It promotes top15 vendors each to launch at
over
200
million
subscribers
with
least two NFC terminals among RMB1,000-above
phone models. The products supporting NFC
adopt NFC-SWP solution based on GSMA unified
standard; China Telecom also recorded 40
million active users and more than 400,000
merchants with transactions of over RMB1.2
trillion via mobile Bestpay APP; China Unicom
achieved online mobile payment via WoPay
which will become a large carrier-featured
Internet
financial
company
with
annual
transactions exceeding RMB500 billion in 2018.
In 2016, operators developed mobile payment
stably according to their positioning. China
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Global and China Mobile Payment Industry Report, 2019-2025
Leader
Main
Products
Status Quo
Participants
Mobile tried the field of public transportation.
China Unicom integrated campus cards of some
universities into Wo Pay. China Telecom focused
on building differentiated end products based on
NFC, encryption, intercom, video, shopping,
games and other three features for terminal
mobile phones
Terminal
mobile
phone
vendors
Apple
NFC Mobile
In 2016, mobile phone vendors embarked on
Samsung
Payment;
layout in China. For example, Huawei Pay, MI
Xiaomi
Huawei
Pay, ZTE Pay and other products realized mobile
Huawei
Pay;
payment layout through cooperation with China
Lenovo
Apple Pay;
UnionPay and the like. Besides binding bank
ZTE and so on
MI Pay;
cards with Quick Pass, Huawei and Xiaomi also
Samsung
introduced
Pay;
applications to shopping, travel, work, payment
ZTE
Pay,
etc.
"bus
cards"
and
extended
the
and so on.
MI Pay can be used in the bus payment systems
of Shenzhen and Shanghai. Huawei Pay not only
suits "buses", but also acts as membership
cards, access cards, etc.
Source: ResearchInChina
Major Payment License Acquisitions in China, 2014-2019
Time
Acquirer
Acquiree
Dec 2014
Wanda Group
68.7% equities of 99bill
Feb 2015
Ant Financial Services Group
25% equities of one97 communications
Jun 2015
Tibet
7.69% equities of Shanghai
Yunbai
Investment
Consideration
Handpay Information
Over USD500 million
&
RMB50 million
Management
Technology Co., Ltd.
Feb 2016
Xiaomi Technology
65% equities of Jiefu Ruitong Co., Ltd.
RMB600 million
May 2016
Newland Computer
Fujian Guotong Xingyi Network Technology
RMB680 million
Jun 2016
Haili Mental One
100% equities of Union Mobile Financial Technology
RMB3 billion
Aug 2016
Midea Group
50% equities of Shenzhou Tongfu Technology
Around RMB300 million
Aug 2016
Evergrande Group
Jifutong Payment
RMB570 million
Sept 2016
VIP Shop
Zhejiang Ebatong Technology
Around RMB400 million
Sept 2016
XinliFinance
100% equities of Beijing Haike Rongtong Payment Service
RMB2,378 million
Sept 2016
Meituan.com
100% equities of qiandai.com
About RMB1 billion
Sept 2016
Meson Fintech
90% equities of Heli Finance
RMB1.4 billion
45% equities of Shanghai JF
RMB945 million
Oct 2016
Shenzhen
Keybridge
Communications
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Global and China Mobile Payment Industry Report, 2019-2025
Mar 2017
China Innovationpay
51% equities of Youzan
HKD3.034 billion
Apr 2017
IELPM
60.4% equities of Guangdong Xinhui E-payment
RMB130 million
Apr 2017
51 Credit Card
100% equities of YACOL
RMB1.1 billion
Jun 2017
Gome
100% equities of Yinyingtong
RMB720 million
Shenzhen Asia Link Technology
45% equities of Shanghai Jifu Information Technology
RMB945 million
Development
Services
Oct 2017
eKing Technology
100% equities of GoPay
RMB1,057 million
Dec 2017
Didi
100% equities of 19Pay
RMB300 million
Dec 2017
Nexgo
100% equities of JLPay
RMB710 million
AnHui XinLi Finance
100% equities of Beijing Haike Rongtong Payment Services
RMB2,379
Sep 2017
Dec 2017
May 2018
May 2018
Sept 2018
Mar 2019
million
(proposed)
Heilan Home
64.16%
equities
of
Shanghai
Handpay
Information
RMB500+ million
Technology
iBOXCHAIN
Nanjing
Mingpeng
Information
22.5% equities of IPS Information Technology
RMB247.5 million
100% equities of Kayou Payment Services
RMB738
Technology
Pan Asia Data Holdings (formerly
million
(proposed)
51% equities of Day's Enterprise
Manfield Chemical Holdings)
HKD7.9
billion
(proposed)
Jun 2019
Seven Cent Payment
100% equities of Yinxinlian (Beijing) Payment
-
Sept 2019
PayPal
70% equities of GoPay
-
Nov 2019
Beijing Cuiwei Tower
100% equities of Beijing Haike Rongtong Payment Services
(proposed)
Source: ResearchInChina
Mobile Payment Transactions in China by Operating Model
Source: China Mobile; China Telecom; Alipay; China Banking Association; ResearchInChina
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Global and China Mobile Payment Industry Report, 2019-2025
3.6 Mobile Payment Overseas Layout
In 2017, the start year of a new era that Chinese mobile payment went abroad, both third-party
mobile payment intuitions and UnionPay geared up overseas layout of mobile payment.
Third-party payment institutions, typically Alipay, WeChat, Baidu Wallet, Suning Pay and JD
Finance, race to make deployments in overseas payment markets. Cross-border payment is an
irresistible trend. As people live a better life, more and more of them travel abroad, among which
those having developed a mobile payment habit create a huge market for cross-border payment.
For policy, the People's Bank of China (PBOC) would inspire market entities’ global layout of
payment for their broader expansion outside China and also encourage them to output payment
services, technologies and standards to take high ground during the development of global
payment industry, which were favorable policies for them to make overseas mobile payment
strategies, said Fan Yifei, the deputy governor of PBOC, in June 2017.
At the two sessions in 2019, 11 members of the National Committee of the Chinese People's
Political Consultative Conference including He Qiang, a professor at the School of Finance of
Central University of Finance and Economics submitted a joint proposal that mobile payment
should be a part of China’s digital strategy and help China’s payment companies output new
technologies and mature experience to the countries joining in the Belt and Road Initiative in
aspects of intergovernmental cooperation, foreign exchange management and credit policy.
The Enterprises with Cross-border Payment License in China
Source: ResearchInChina
Overseas Layout of Mobile Payment Firms, 2019
Company
Overseas Layout
Alipay
Alipay started overseas layout in 2007. By the end of 2019, Alipay had entered more than 50 countries and regions
such as Russia, the US, Spain, France and Brazil, allowing for settlement in more than 20 currencies (e.g., USD,
HKD, GBP, EUR and JPY). Alipay has partnered with more than 250 financial institutions worldwide: on one hand,
providing overseas merchants and users with online collection and payment services; on the other hand, providing
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Global and China Mobile Payment Industry Report, 2019-2025
Chinese consumers with outbound offline payment services when they are in the 54 countries and regions
available. Meanwhile, “Alipay local versions” are launched in 9 countries and regions, serving local users.
In Oceania, Alipay and its parent company Alibaba co-funded a subsidiary to tap payment market through
RoyalPay. Also, Alipay buys in Paytm (India’s equivalent of Alipay), K-Bank (South Korea’s internet bank) and Mynt
(Philippines’ digital finance firm) and seeks cooperation with foreign large companies, for example, establishing a
joint venture with Indonesia’s Emtek for developing online mobile payment products together. On March 14, 2019,
Alipay and Barclays Bank, a large financial institution in the world, reached an agreement according to which
Barclaycard, a unit of Barclays Bank, will assist more than 110,000 British merchants to accept Alipay payments
made by Chinese visitors to the UK.
WeChat Pay
WeChat Pay started overseas layout in 2012, and now has operations in more than 49 countries and regions. It
allows settlement with over 16 foreign currencies. In January 2019, WeChat Pay and LE BHV MARAIS, a French
famous department store, joined forces to launch a smart department store which will introduce WeChat Pay smart
ecological solution. At present, WeChat Pay's cross-border payment service has become legally available in 49
countries and regions, supporting 16 currencies.
UnionPay
On December 11, 2017, UnionPay together with other institutions (commercial banks, payment institutions, etc.)
launched a unified mobile payment APP—Yunshanfu (literally flash cloud payment). At present, the APP users can
use UnionPay mobile payment service in 48 countries and regions. Outside China, UnionPay QR code payment
service has become available in 32 countries and regions, e.g., Asia Pacific, Central Asia, South Pacific, Middle
East, Africa and North America; more than 2.8 million POS terminals in 37 countries and regions including Japan,
Singapore, Australia, New Zealand, Canada and Russia accept payment via the APP.
Baidu
In April 2017, Baidu selected Thailand as the first station as it found inroad into overseas market; Baidu also forged
Wallet
a strategic partnership with PayPal, an international payment giant. In the future, the partnership will allow Baidu
Wallet users to make online purchases outside China by linking their Baidu Wallets to PayPal, and foreign
merchants that accept PayPal will automatically accept Baidu Wallet as a result; multiple merchants in four major
tourism cities of Thailand can accept barcode payment; Baidu will also have presence in South Korea and Japan.
JD Finance
In September 2017, JD Finance and Central Group, a well-known Southeastern company, founded a joint venture
for providing financial technologies and services for consumers.
BestPay
BestPay users can enjoy the same mobile payment services in designated department stores, restaurants,
convenience stores and pharmacies in Sydney, Melbourne and Canberra, as they do in China. BestPay supports 9
currencies, i.e., RMB, USD, AUD, GBP, JPY, HKD, KRW, EUR and CAD.
Suning Pay
In 2017, Suning started payment layout in China Hong Kong and Japan. Suning already makes payment
deployments in 18 countries and regions like South Korea and Japan, supporting over 15 currencies. Its payment
service has made its way into fields such as commodity trade, overseas education, air ticket and hotel.
Source: ResearchInChina
3.7 Development Trend
3.7.1 Tougher Regulation of and Tighter Access to Payment Market
Regulation for third-party payment is under way and increasingly strict:
Firstly, PBOC further tightens issuance and renewal of payment license. By the end of 2019, 237
firms were approved the extension of validity and 34 lost their licenses.
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Global and China Mobile Payment Industry Report, 2019-2025
Secondly, in addition to tighter release of licenses, tougher regulation makes tickets from illegal
operation the normal. The incomplete statistics shows that as of June 30, 2019, the central bank
had issued 54 bills to payment institutions, with total penalties reaching roughly RMB45.18 million.
Well-known payment institutions like Suning Pay and Chinabank Payments were on the fine list.
According to the bills released by Operations Office (Beijing) of PBOC on February 26, 2019,
YeePay was confiscated illegal income of around RMB4.4643 million and fined virtually RMB4.96
million, totaling RMB9.4243 million, the biggest bill the PBOC issued in the first half of 2019.
Thirdly, requirements on deposit of provisions get stricter and unified depository is being carried
out in phases: the first phase of provisions occupying 20% (12%-24%) with no interests paid went
into effect from January 1, 2017 and the first deposit occurred on April 17, which will cut profits of
payment firms after 100% deposit.
Fourthly, a network union platform is built. Powered by regulators, construction of “Online
Settlement Platform for Non-banking Payment Institutions”, also called “Nets Union Platform”,
precedes faster than the expected. According to the PBOC, online payment accepted by payment
institutions through bank accounts shall be handled on the platform from June 30, 2018; moreover,
banks and payment firms shall finish connection to the platform and business transfer before
October 15, 2017.
China Nets Union Clearing Corporation as a Regulator on Payment Institutions
Source: ResearchInChina
Finally, regulators will take more efforts on rectification of unlicensed payment. According to the
incomplete statistics, PBOC has issued more than one hundred tickets over the year to December
20, 2017, tripling last year when 34 were written out, and 67 payment companies were fined for
total RMB24.68 million on the aspects of provisions, anti-money laundering, customer benefits
and operation compliance.
Key Regulatory Policies & Contents on Chinese Payment Institutions
Regulatory Areas
Core Contents
Implications
License Compliance
License application: complete market access system and strict
The strict market access system
regulatory mechanism have been built;
requires approved companies to
License renewal: renewal application shall be submitted within six
meet
months before expiration, and those unqualified for the approval
requirements.
51
specific
regulatory
Global and China Mobile Payment Industry Report, 2019-2025
requirements of the PBOC shall not gain extension.
Provisions
Unified management system for customers’ provisions of payment
Payment firms’ embezzlement and
firms shall be built and “Nets Union”, an online settlement platform for
occupation
third-party payment institutions, shall come into trial operation;
provisions shall be corrected and
payment firms shall put provisions in designated accounts as required
prevented,
with no interests paid.
payment firms shall be urged to
of
customers’
and
third-party
return to their original business,
that is, payment.
Real-name System
User identity verification system shall be set up for administrating
The baseline of real-name system
customers in their real names and effective measures shall be taken to
is for account security and normal
verify
identity
economic order and plays a big
verification methods constantly applied during the existence of
customers’
basic
information
when
registering;
part in preventing anti-money and
business relationship with customers shall ensure effective verification
terrorist financing.
of customer’s identity and their real willingness.
Anti-Money Laundering
Concrete
administrative
measures
launched
shall
specify
the
Refining
responsibilities
responsibilities of payment institutions, from customer identity
obligations
verification, identity information and retention, suspicious activity
economy in normal order.
reporting
and
investigation
into
anti-money
laundering
is
a
way
to
and
counter-terrorist financing, to supervision and management.
Source: ResearchInChina
Trends of Policies on Mobile Payment in China
Renewal of licenses of the
first batch of third-party
payment firms is delayed
Extension
Operations
of
multiple institutions
shrink
Shrinkage
PBOC stops to issue
new
third-party
payment licenses
No Longer
Isuusing
new ones
Source: ResearchInChina
3.7.2 Security Issue Is Taken Seriously
With rapid development of mobile payment, security problems in the industry gradually come out,
as a result of richer mobile payment scenes and inflation of user scale. At present, there are chiefly
three risks in mobile payment: disclosure of user’s privacy, payment application fraud and
malicious virus attack.
52
and
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Global and China Mobile Payment Industry Report, 2019-2025
Vulnerabilities of Mobile Payment
Privacy Leakage
Payment APP Fraud
Malicious Virus Attack
Users’ personal information
Mobile APPs vary in quality
Some malicious APPs users
is easy to steal and tamper
and users’ financial accounts
download
for imperceptible cache of a
and passwords are easy to
phones
page
steal after they download
advantage of vulnerabilities at
mobile phone, and automatic
copycat
moreover,
customer end and then lead to
screen capture at backend
transmitted information on
poor performance of mobile
cause information security
mobile phone is likely to be
phone
problems like crank call and
stolen as long as users apply
through virus Trojan, secrete
junk message.
WiFi designed by hackers, so
texting, advertisement push
that fraud risks appear.
or other unwanted ways.
with
passwords
on
APPs;
on
by
or
their
mobile
accident
economic
take
loss
Source: ResearchInChina
In 2019, XIANPEI.360.CN (mobile phone) received 3,924 mobile phone fraud reports, 1,930 of
which were application frauds, a total of RMB15.465 million involved in these cases, namely
RMB8,013 per person.
Of all application frauds, financial wealth management cases accounted for most, or 25.3% of the
total, followed by gambling and lottery (18.4%), deceptive part-time job (13.7%), identify theft
(12.8%) and online game trading (5.1%). In terms of fraud amount, financial wealth management
was till the highest, reaching RMB4.992 million, or 32.3% of the total; gambling and lottery
followed with RMB4.862 million or 31.4% of the total; fraud amount of identify theft was totally
RMB2.715 million, or 17.6% of the total, ranking third. By loss per person, gambling and lottery
stayed at the top spot with RMB13,658, followed by identify theft (RMB10,947) and financial
wealth management (RMB10,208).
Ways for Chinese Payment Users to Contact Defrauds, 2019
By Fraud Reports
By Fraud Amount
53
Global and China Mobile Payment Industry Report, 2019-2025
Malware
3.1%
Stolen Virtual
account products
3.8%
3.7%
Others
9.8%
Deceptive
shopping
4.2%
Online
game
trading
5.1%
Identify
theft
12.8%
Financial
wealth
manageme
nt 25.3%
Deceptive
part-time
job 13.7%
Others
Deceptive
Deceptive Stolen Pal 1.3%
2.1%
account
prize
shopping
1.5%
winning
1.5%
1.1%
Online
game
Financial
Deceptive
trading
wealth
part-time
1.6%
managem
job 9.5%
ent 32.3%
Identify
theft
17.6%
Gambling
and lottery
18.4%
Gambling
and
lottery
31.4%
Source: 360, ResearchInChina
3.7.3 Industry Trend
At present, mobile payment market is in the situation of high concentration and rapid expansion
and comes to mature simultaneously with third-party payment. Regulation is moving on as
payment habits take changes. Mobile payment grows far more rapidly than the PC end payment by
transaction scale.
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Global and China Mobile Payment Industry Report, 2019-2025
Development Trends of Mobile Payment Business
● Layout of mobile payment gradually orients to industry-wide application solution from
single application scene.
● Mobile payment platform will lean to consumer in development, specialization and
differential applications and services are the key.
● Mobile payment heads towards socialization.
●Mobile payment companies show a greatly centralized trend, and operators and
financial institutions speed up integration.
●Research and development and innovation of mobile payment products play a crucial
role, and efficiency decides the future of products.
Source: ResearchInChina
Industry-wide payment field needs to form a complete closed-loop, included in three links, i.e.,
online port (mobile application or wallet), offline scene (connection to merchants) and real-time
payment (remote or NCF). Intelligent business models with functions of data, payment, client and
after-sales, need to be built, so that users are more willing to use mobile payment.
Trends of Presence in Mobile Payment Business
Conventional mobile payment is limited to
Mobile payment heads to solutions for all
designated areas and applications
industry scenes
Source: ResearchInChina
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Global and China Mobile Payment Industry Report, 2019-2025
Development Trends of Mobile Payment Platform
Conventional Focus: Partner Orientation
Future Focus: Customer Orientation
Source: ResearchInChina
Trends of Cooperation between Mobile Payment Enterprises
Source: ResearchInChina
In terms of enterprise pattern, online mobile payment companies show a greatly centralized trend,
while the offline are scattered, leading a fiercer competition. Moreover, operators and financial
institutions will present an integrated trend in the future.
As for technology, the development of mobile payment has higher requirements on payment
security. Besides identification technologies like password authentication and fingerprint
recognition, payment token, trusted execution environment (TEE) and other technologies are also
maturing.
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Global and China Mobile Payment Industry Report, 2019-2025
Mobile Payment Transactions in China, 2019-2025E
(RMB Trillion)
2019E
2020E
2021E
2022E
2023E
2024E
2025E
Transaction Size
589.7
747.5
926.8
1,140.2
1,374
1,580.2
1,769.1
YOY Growth
32.5%
26.8%
24.0%
23.0%
20.5%
15.0%
12.0%
Source: ResearchInChina
Chinese Mobile Payment Market Structure, 2025E
Third-party Mobile Payment
2021E
Mobile Banking
54.8%
45.2%
Source: ResearchInChina
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Global and China Mobile Payment Industry Report, 2019-2025
4. Mobile Payment Market Segments
By dominant players, mobile payment is mainly divided into UnionPay, bank, third party, operator
and phone terminal manufacturer oriented.
In 2018, China totally processed 532.814 billion mobile payment transactions, up 92.48%. Among
them, banking financial institutions and third-party payment institutions handled 60.531 billion
transactions and 472.283 billion transactions, sharing 11.4% and 88.6%, respectively. Mobile
payment finance hit 445.22 trillion yuan, up 44.53% yr-on-yr; among them, banking financial
institutions and third-party payment institutions amounted 277.39 trillion yuan and 167.83 trillion
yuan, sharing 62.3% and 37.7%, respectively.
By technology, mobile payment in China is remote payment based, and NPC payment just shares
0.1%.
QR code payment is the main layout technology for third-party mobile payment
enterprises;
banks and
UnionPay are
dominated
by NFC
(near
field
communication)
technology-oriented near-field payment layout e.g. Cloud QuickPass.
Since 2017, driven by UnionPay, such intelligent terminal players as Apple pay and Huawei pay
cooperated with some third-party payment organizations such as JD.com Flash Pay and Meituan
flash pay to further strengthen NFC payment promotion.
In future market segments, the competition between third-party mobile payment and banks will
be fiercer; enterprises have successively provided more convenient, safe and fast payment
services to attract customers. As regulatory policies take effect and aggregated payment emerges,
QR code payment will still prevail. Considering security, the technologies such as NFC, fingerprint
and biometric recognition will grow mature.
4.1 Third-party Mobile Payment
4.1.1 Overview
Third-party mobile payment is in rapid growth. In 2018, China’s third-party mobile payment
market transaction scale totaled RMB167.83 trillion, up 59.7% year on year. With respect to the
current market share, Alipay ranked first with a 54.3% share and Tenpay 39.2%, altogether
accounting for over 90% and immensely carving up the market.
Main Characteristics of Third-party Mobile Payment
Characteristics of Third-party Mobile Payment (in the case of non-banking payment
institution)
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Global and China Mobile Payment Industry Report, 2019-2025
1
Emerging payment
methods, QR code
included, sped up the
transfer from PC end to
the mobile end.
Transaction amount:
Internet payment:
mobile payment =51.6:
48.4
Share of mobile payment
was up 1.4 percentage
points versus 2014.
3
2
Remote payment took the
overwhelming majority
and NFC increased a little.
Transaction amount:
Small amount and convenience
were highlighted, and mobile
payment of payment institutions
and internet payment of payment
accounts were well-matched in
amount per deal.
Remote payment:
NFC=99.66: 0.34
Commercial banks varied a lot in
amount per deal.
Number of special NFC
merchants rocketed by
118.45% on an annual
basis.
Mobile payment: RMB6,127.97
Internet payment: RMB45,200
Amount per deal in mobile
payment of payment institutions:
RMB525.59
Source: Payment & Clearing Association of China; ResearchInChina
Third-party mobile payment industry chain connects users and merchants. Users are connected
with payment platform via intelligent terminals (phone/watch/bracelet) with chips and NFC
payment function. A third-party payment institution is a channel as well as a platform that
connects merchants and users to form a benign circulation. NFC payment relies on biometric
identification technologies like QR code, sound wave and fingerprint; hardware/software
developers and system integrators support and provide SIM card, chip, mobile terminal, intelligent
POS machine, etc., banks/UnionPay and clearance center provide bank account, payment and
settlement and other functions.
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Global and China Mobile Payment Industry Report, 2019-2025
Third-party Mobile Payment Industry Chain in China
Source: ResearchInChina
4.1.2 Market Size
In 2015-2018, China third-party payment presented explosive growth with market scale CAGR of
97.0%. It was estimated the market size in 2019 would rise 48.6% to RMB249.5 trillion, and will
keep growth rate over 10% in future and hit RMB969.1 trillion in 2025.
Chinese Third-party Mobile Payment Market Size, 2015-2025E
1200
180.0%
160.0%
1000
140.0%
800
120.0%
100.0%
600
80.0%
400
60.0%
40.0%
200
0
20.0%
2015
2016
2017
2018
2019
2020E 2021E 2022E 2023E 2024E 2025E
Market size (RMB trillion)
0.0%
Growth(%)
2015
2016
2017
2018
2019
2020E
2021E
2022E
2023E
2024E
2025E
Market size (RMB trillion)
21.96
51.01
105.11
167.83
249.5
333.3
443.1
582.5
738.6
862.9
969.1
Growth (%)
166.5%
132.3%
106.1%
59.7%
48.6%
33.6%
33.0%
31.5%
26.8%
16.8%
12.3%
Source: ResearchInChina
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Global and China Mobile Payment Industry Report, 2019-2025
4.1.3 Market Structure
In recent quarters, the offline scanning payment market has continued to grow at a faster rate
than the overall market, driving the proportion of mobile consumer segments to increase
continually. At the same time, mobile finance sector takes up more and more share, up from 16.3%
to 18.2%.
Structure of Third-party Mobile Payment Transactions in China by Type of Business,
2018-2019
2018Q1
2018Q2
2018Q3
2018Q4
2019Q1
2019Q2
2019Q3
2019Q4
Personal Application
66.9%
63.3%
61.7%
60.0%
61.3%
57.9%
57.5%
57.3%
Mobile Finance
16.3%
17.2%
17.1%
16.9%
17.4%
17.8%
18.1%
18.2%
Mobile Consumption
13.7%
17.0%
18.6%
20.8%
19.2%
21.4%
22.2%
22.2%
Others
3.1%
2.6%
2.6%
2.3%
2.1%
2.9%
2.2%
2.3%
Source: ResearchInChina
4.1.4 Competitive Landscape
Alipay and Tenpay, as two third-party payment giants, occupied over 90% of the third-party
payment market. In 2019, Alipay continued to rank first by 54.3% share; Tenpay’s share rose 0.4
percentage points to 39.6%.
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Global and China Mobile Payment Industry Report, 2019-2025
Market Share of Third-party Mobile Payment in China, 2018-2019
2018
Alipay
Tenpay
YiWallet
UMPay
39.20%
JDPay
54.30%
99Bill
Yeepay
China UMS
Suning Pay
2019
Alipay
Tenpay
YiWallet
UMPay
39.60%
JDPay
54.30%
99Bill
Yeepay
China UMS
Suning Pay
2018
2019
Alipay
54.3%
54.3%
Tenpay
39.2%
39.6%
YiWallet
1.8%
1.7%
UMPay
0.8%
0.7%
JDPay
0.7%
0.8%
99Bill
0.7%
0.6%
Yeepay
0.6%
0.6%
China UMS
0.4%
0.4%
Suning Pay
0.2%
0.2%
Others
1.3%
1.1%
Source: ResearchInChina
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Global and China Mobile Payment Industry Report, 2019-2025
4.2 Mobile Banking
4.2.1 Overview
Mobile banking refers to a sort of electronic banking service handled by the users by relying on
mobile communication network.
In the well-developed international market, the mature mobile banking can offer a variety of
business like account service, brokerage and information service, and in the future all kinds of
bank business can be almost covered. Because of huge mobile users in Chinese market, the
prominent application prospects has allured wide participation of banks, operators, third-party
service providers and different business modes have been developed in practice. Along with the
upgrading of telecommunication technologies and terminal equipment, the improvement of
telecom infrastructure as well as the consummation of mobile banking technologies, mobile
banking will play a more important role in the business structure of Chinese banks.
In a chronological order, mobile banking is implemented currently by five means including SMS,
USSD, STK, Client and WAP.
Implementations and Merits & Demerits of Mobile Banking
Implementation
Merits
Demerits
SMS mobile banking
Easy implementation of technologies;
Poor
strong adaption of mobile terminal, and
complicated operations; low level of safety
interactivity;
unfavorable
to
promotion
of
easily accessible for users
USSD mobile banking
Good interaction; no card change,
Full
easily accessible for users
network stability
Perfection and high security of identity
STK cards of banks are incompatible; it costs much to
banking
authentication system
change a STK card
WAP mobile banking
Excellent
STK
card
mobile
compatibility;
good
network
interconnection
is
impossible;
poor
A user is required to manually input the domain name of
WAP site; restricted by network conditions, the user
interactivity, high security
experience remains unstable
Client mobile banking
Friendly interface, strong interaction,
High development costs; the development is carried out
high security
for different platforms and operating systems; with high
requirements on terminal performance
Source: ResearchInChina
Classification of Mobile Banking
Mode
Classification
Mobile banking in broad sense
SMS Banking
Mobile Internet Banking
Others
Mobile banking in narrow sense
Mobile Internet Banking: APP, WAP
Source: ResearchInChina
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Global and China Mobile Payment Industry Report, 2019-2025
The development of mobile banking is still led by banks at present and based on bank accounts
opened in banks to provide the users with related banking services. The industrial chain involves
players consisting of banks, providers of solutions, telecom operators, terminal suppliers, and
users.
Mobile Banking Industry Chain
Source: ResearchInChina
4.2.2 Market Size
Over the years, commercial banks saw mobile payment business grow rapidly. In 2018, China
banking financial institutions handled 175.192 billion electronic payment transactions with
amount of 2539.7 trillion yuan. Among them, mobile payment processed 60.531 billion
transactions and 277.39 trillion yuan, up 61.19% and 36.69% yr-on-yr, respectively. By remote
payment, commercial banks used mobile banking to provide account management, payment by
remittance, investment and wealth management and other mobile financial services, and their
more efforts on barcode payment layout and operation of QR code-based aggregated payment
gave a certain boost to integration of mobile financial channels. As for NFC, commercial banks not
only struck cooperative agreements with operators related to the industry chain for supplying
backend settlement services for them but quickened the pace of promoting their own NFC
payment. In particular, when Apple Pay went online in China in 2016, banks made a quick respond,
and then commercial banks began to enrich their NFC payment products following the release of
Samsung Pay, Huawei Pay and MI Pay.
As smart phone has been prevalent in recent years, mobile banking transactions have swelled. As
commercial banks expedite layout in mobile end, technologies such as Cloud-based Quick Pass
and QR payment are promoted, and preferential policies have been released successively, mobile
banking transactions keep climbing and is expected to reach RMB800.00 trillion in 2025.
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Global and China Mobile Payment Industry Report, 2019-2025
Mobile Banking Transactions in China, 2015-2025E
2015
2016
2017
2018
2019E
2020E
2021E
2022E
2023E
2024E
2025E
Transactions (RMB Trillion)
108.22
157.55
202.93
277.39
340.23
414.21
483.67
557.70
635.40
717.30
800.00
YOY Growth
379.1%
45.6%
28.8%
36.7%
22.7%
21.7%
16.8%
15.3%
13.9%
12.9%
11.5%
Source: The People’s Bank of China; ResearchInChina
4.2.3 Competitive Landscape
Mobile Phone Bank Users Scales of Major Banks in China, as of the end of 2018
User scale (mln)
Bank of Communications
74
China Merchants Bank
78
China Construction Bank
311
Bank of China
145
Agricultural Bank of China
258
Industrial & Commercial Bank of China
313
0
Industrial
Commercial
&
Bank
50
100
150
313
250
300
350
Agricultural
Bank of
China
China
Bank
Bank of China
China
Construction
Merchants
Communications
Bank
Bank
311
78
of China
User scale (mln)
200
258
145
Source: ResearchInChina
65
74
of
Global and China Mobile Payment Industry Report, 2019-2025
In the past two years, the mobile banking business of Industrial and Commercial Bank of China,
Construction Bank and Agricultural Bank developed rapidly, successfully occupied most of the
market share. In 2017, the mobile banking business revenue of above three banks registered
57.32 trillion yuan, 39 trillion yuan and 31.8 trillion yuan, totally sharing 63.1%. In 2018, their
market shares declined as other banks caught up.
In 2018, the transaction amount of mobile banking users of Construction Bank of China hit 58.24
trillion yuan with 21.915 billion transactions, market share dropped to 21%, but it was still the
No.1 mobile banking.
Market Share of Mobile Banking in China, 2017-2018
66
Global and China Mobile Payment Industry Report, 2019-2025
2017
2018
China Construction Bank
28.2%
21.0%
Industrial & Commercial Bank of China
19.2%
18.7%
Agricultural Bank of China
15.7%
17.0%
China Merchants Bank
8.8%
9.9%
Bank of China
5.4%
7.2%
Bank of Communications
3.8%
4.0%
Others
18.9%
22.2%
Note: Since ICBC, Agricultural Bank and China Merchants Bank did not
disclose 2018 mobile banking revenues, thus above data were estimated.
Source: ResearchInChina
4.2.4 Development Trend
Development Trends of Mobile Banking
1. Based on basic functions, mobile banking orients to
differentiation of functions.
2. Mobile banking makes layout by use of its social attributes.
3. Scene + mobile payment will be the key layout area and
battlefield of mobile banking.
Source: ResearchInChina
4.3 Operators’ Mobile Payment
In recent years, three major operators have founded mobile payment companies and obtained
third-party payment license, with mobile payment as one of the key businesses. However, mobile
payment differs from traditional services of operators; coupled with increasingly fierce market
competition, it is hard for operators to continue existing advantages. Three major bottlenecks are
restricting the potential of operators for mobile payment development.
On the overall strategic level, three major operators have launched mobile payment (online) and
mobile wallet (offline), China Mobile centered on creating Internet portal and integrating product
line integrates its past mobile wallet and mobile payment to market “Hebao”; China Telecom
adopts the Internet finance operation mode of “communication + pay + financing”, aiming at
becoming modern financial enterprise cluster with characteristics of Internet and operators; China
Unicom lays more emphasis on the trans-boundary innovation with Internet giants and financial
sector for channel sharing and complementary advantages.
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Global and China Mobile Payment Industry Report, 2019-2025
Operators’ Operating Models of Mobile Payment
Source: ResearchInChina
In terms of connection with banks, there are two mobile payment modes of operators. First,
indirect connection to banks i.e. operators are firstly connected to centralized exchange platform
of UnionPay, which then sees cooperation with banks. Such linking way can collect banks on the
same platform and speed up the promotion of operators. Second, “one-to-one” direct connection
which can shortens flow path, but due to lack of UnionPay’s exchange platform, the integration
needs to be completed independently by operators and banks. The two modes can coexist for
having both advantages and disadvantages.
In the link of payment transaction, operators mainly depend on UnionPay’s acceptance network,
which rapidly popularizes mobile payment, but also economizes overlapping investment and
construction consumed capital. Laying POS terminal is not the strength of operators, thus
requiring dependency on UnionPay system.
Mobile Operators Dominate Mobile Payment Value Chain
Source: ResearchInChina
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Global and China Mobile Payment Industry Report, 2019-2025
4.4 Barcode Payment
4.4.1 Technology
At present, barcode payment is led by 2D barcode payment. 2D Barcode, taking QR code as carrier,
stores account and bargain price information, which can be recognized by reading terminal. It can
realize remote payment via Internet after obtaining payment data.
2D barcode payment is advantaged in convenient use, short industrial chain and clear interest
relationship, without exchanging communication equipment and capable of being applied to small
payment scenario (such as vending machine and vegetable market) and satisfying small payment
demand. Its hardware terminal includes reading equipment and mobile communication terminal,
while software terminal includes solution provider, added value service and merchant platform.
Although once limited by policy, 2D barcode payment continues to occupy China’s mobile payment
market share due to its built-in and acquired advantages.
Framework of QR Code Payment System
Source: ResearchInChina
Major Devices/Facilities for and Functions of 2D Barcode Payment
Major Devices
Functions
2D barcode
Ensure access link or pay order of payment access system
Smart phone and operation system
Install payment client-side app
Payment client-side app
Bind bank card; recognize 2D barcode; complete payment
Wireless network
Transmit payment data
Payment access system
Process user payment request
Source: ResearchInChina
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Global and China Mobile Payment Industry Report, 2019-2025
2D Barcode Payment Industry Chain
Source: ResearchInChina
4.4.2 Status Quo
As 2D barcode has no unified safety identification standard, it has risks in terms of customer
real-name verification, payment instrument confirmation, payment safety and transaction
information. In Mar. 2014, the Central Bank demanded to suspend 2D barcode payment service.
In the first two year of promoting 2D barcode payment, 2D barcode payment was under grey zone
of supervision until officially approved by the government in Aug. 2016.
On Aug. 3, 2016, Payment & Clearing Association of China published Standards for Barcode
Payment Business (Exposure Draft) to payment institutions, and clarified safety standards obeyed
by payment institutions when conducting barcode business.
The Standards for Barcode Payment Business (tentative) (hereinafter referred to as the
Regulations) released by the People’s Bank of China on December 27, 2017, specifies business
qualification requirements and barcode generation rules, and also puts a cap on the amount of
money in barcode payment; moreover, it warns players of their unfair competition activities such
as “money burning” and “subsidiary”. The Regulations will formally come into effect from April 1,
2018.
According to the Regulations, barcode payment consists of payer scanning payment and payee
scanning payment. Thereof, the former refers to users scanning barcode for payment, also called
“active scanning”, that is, an activity that a payer uses mobile terminals like mobile phone and pad
to read payer’s barcode to complete payment; the latter refers to users being scanned barcode for
payment, also called “passive scanning”, that is, an activity that a payee uses a device to read
payer’s barcode on a mobile terminal to complete collection.
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Global and China Mobile Payment Industry Report, 2019-2025
In this regard, the Regulations splits prevention capability of QR code payment risks into four
levels, A, B, C and D, in descending order, which means the higher prevention level is, the larger
amount of payment limit per day is. For example, static barcode is at the lowest level D for being
easy to tamper and carry Trojans or viruses pushes up payment risks to the highest level, and a
customer’s total transaction amount per day on a single bank account or all payment accounts as
well as fast payment is no more than RMB500, regardless of verification model.
Currently, in mobile payment field, 2D barcode payment is the most mature and fast developed
method, surpassing NFC payment.
Development History of Barcode Payment
Time
Event
Mar 2014
The PBOC released notice to suspend QR code payment services of related payment institutions.
Jul 2016
China Construction Bank, China Minsheng Bank, China CITIC Bank and China Merchants Bank
followed the trail of Industrial and Commercial Bank of China to launch their own QR code
payment products.
Aug 2016
According to the Standards for Barcode Payment Business (exposure draft) released by Payment
& Clearing Association of China, QR code payment was approved by regulators.
Nov 2016
UnionPay released the Letter Concerning Application for Cooperation on Promoting UnionPay
Card-based QR Code Payment Products and Related Standards and Regulations.
Dec 2016
QR code payment standards unveiled by UnionPay included Unionpay 2D Barcode Payment
Application Standard and Unionpay 2D Barcode Payment Safety Regulation.
May 2017
UnionPay partnered with more than 40 banks to launch QR code payment products.
2017
Banks rolled out their own QR code payment products.
Dec 2017
The Standards for Barcode Payment Business (tentative) issued by the PBOC specified barcode
payment cap.
Apr.1,2018
From Apr.1, 2018, the one-day limits of all static scanning code payment is set to 500 yuan
Sep.2019
Central Bank of China issued 2019-2021 FinTech Development Planning, which mentioned by the
end of 2021 at the latest, two-dimensional code payment will be interconnected and
one-code-fits-all will be realized.
Source: ResearchInChina
Taking WeChat payment as example, from 2017-2019, small and medium-sized businesses
transaction of WeChat payment increased 10-fold in three years. As of 2019, over 50 million
individual merchants and merchants are active in WeChat payment platform, accounting for 79.4%
of total individual merchants with industry covering fruit and vegetable, fresh food, taxi, fast food,
snack and convenience store, etc. Long-tailed merchants account for 40% of Wechat payment
small and medium-sized merchants, post-80s account for 39% as the backbone, 19% merchants
are over 50 years old. At the same time, WeChat has penetrated into business life of merchants,
and the face-to-face collection codes of small and medium-sized businesses cover 70%.
Businessmen are accustomed to using mobile phones to manage business and provide services
through WeChat accounts.
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Global and China Mobile Payment Industry Report, 2019-2025
In the retail sector, the number of transactions per capita concluded through WeChat payment
reached 5.8; the average number of transactions of code-sweeping for meal ordering and for trip
per month increased 619% and 2.05 times respectively compared with 2018. In addition, WeChat
App brush code payment service helps subway entering efficiency increase 300 times.
Since 2017, The scale of China's offline code sweeping payment transactions had increased rapidly
quarter by quarter. Entering 2019, China's offline code sweeping payment has been relatively
perfect in scenario coverage, users’ habit of sweeping codes has been gradually formed, offline
code sweeping payment market has also entered a stable growth stage, the quarter-on-quarter
growth rate is greatly affected by seasonal fluctuations in the consumer market.
Quarterly Transactions Scale of China's Off-Line Scan Payment, 2017-2019
9
8
8
8.5
8.2
7.4
7.2
7
5.9
6
4.8
5
4
3.5
2.6
3
1.9
2
1
0
1.2
0.6
104.1%
57.6%
32.4%
35.0%
36.9%
24.9%
20.5%
8.1%
3.7%
3.2%
2.5%
2017Q1 2017Q2 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4
Transaction scale (RMB trillion)
Transaction scale
QoQ (%)
2017Q1
2017Q2
2017Q3
2017Q4
2018Q1
2018Q2
2018Q3
2018Q4
2019Q1
2019Q2
2019Q3
2019Q4
0.6
1.2
1.9
2.6
3.5
4.8
5.9
7.2
7.4
8.0
8.2
8.5
104.1%
57.6%
32.4%
35.0%
36.9%
24.9%
20.5%
3.2%
8.1%
2.5%
3.7%
(RMB trillion)
QoQ (%)
Source: ResearchInChina
In Sep.2019, Central Bank of China issued 2019-2021 FinTech Development Planning, which
mentioned by the end of 2021 at the latest, two-dimensional code payment will be interconnected
and one-code-fits-all will be realized. From the user's point of view, they can randomly select the
payment codes of payment institutions such as APPs of various banks, WeChat and Alipay, and
show it to merchants, thus payment can be made.
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Global and China Mobile Payment Industry Report, 2019-2025
Future, integration payment will be the development goal of two-dimensional barcode payment. It
is estimated the transaction scale of integration payment in China will hit 50 trillion.
Transaction Scale of China Integration Payment Market, 2016-2025E
60
400.0%
372.0%
50
50
44.1
300.0%
37.4
272.0%
40
250.0%
30.5
30
200.0%
21.7
20
10
0
150.0%
13.2
0.3
1.5
2016
2017
8.4
5.5
2018
52.7%
2019E
64.4%
57.1%
2020E
2021E
100.0%
40.6%
2022E
Transaction Scale (RMB trillion)
Transaction Scale (RMB trillion)
350.0%
22.6%
2023E
17.9%
2024E
50.0%
13.4%
0.0%
2025E
YoY growth (%)
2016
2017
2018
2019E
2020E
2021E
2022E
2023E
2024E
2025E
0.3
1.5
5.5
8.4
13.2
21.7
30.5
37.4
44.1
50.0
372.0%
272.0%
52.7%
57.1%
64.4%
40.6%
22.6%
17.9%
13.4%
YoY growth (%)
Source: ResearchInChina
4.4.3 Presence of Enterprises
In 2014, since Central Bank halted 2D barcode payment, banks suffered standstill in this field. In
the past two years, third party payment enterprises actively distributed 2D barcode payment field.
At present, Alipay and TenPay occupy over 90% of 2D barcode payment market share in China.
Since Central bank officially accept 2D barcode payment in 2016, banks including ICBC, CCB and
China Minsheng Bank, started to focus on 2D barcode payment, which intensified market
competition for some extent.
On Dec. 12, 2016, China Unionpay officially launched 2D barcode payment standard. Third party
organizations first to support the standard include 99Bill, ChinaUMS, All in Pay, Lakala, Sandpay
and ChinaPnR. Besides, ICBC independely developing 2D barcode products also supports the
technical standard. In May 2017, UnionPay’s partnership with more than 40 commercial banks for
launching QR code payment products made market competition fiercer.
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Global and China Mobile Payment Industry Report, 2019-2025
Modes of Unionpay 2D Barcode Payment
Source: ResearchInChina
On Dec. 12, 2016, Unionpay announced to implement Unionpay 2D barcode payment standard,
which includes two regulations, namely, Unionpay 2D Barcode Payment Safety Regulation and
Unionpay 2D Barcode Payment Application Standard, emphasizing fourth party mode of bank card
payment. The fourth party mode refers to that fourth party (card issuer, acquiring bank, merchant
and card organization) can enjoy profit share after consumers pay via bank card in stores when
there is no third party payment. The fourth party mode adopts Token technology, effectively
guaranteeing payment safety. Besides, with payment tokenization technology, Unionpay 2D
barcode is capable of protecting account sensitive information, effectively guaranteeing account
information safety during storage, processing and transmission, and preventing account
information leakage.
Unionpay 2D Barcode payment solution includes two parts, one is online and show widow (goods
position for attracting customer or propagandized in network shop) code scanning payment, while
another is offline code scanning payment. The solution replaces card swiping link with code
scanning based on original offline card acquiring distribution system.
4.5 NFC Payment
4.5.1 Technology
NFC integrates three main data development routes.
RFID technology roadmap, i.e., radio frequency identification technology
Magnetic stripe card technology roadmap
Mobile terminal roadmap, evolution of terminal devices with NFC function
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Global and China Mobile Payment Industry Report, 2019-2025
Development Course of NFC Technology
Source: ResearchInChina
Technical Framework of NFC
Source: ResearchInChina
From the user’s point of view (i.e., above Application layer), NFC has three operation modes:
Reader/write: it is short for R/W and related to NFC Tag/NFC Reader;
Peer-to-Peer: it is short for P2P and supports interaction between two NFC devices;
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Global and China Mobile Payment Industry Report, 2019-2025
NFC Card Emulation: it is short for CE that can simulate the device with NFC function into a Smart
Card, which enables functions like mobile payment and door access card.
Operating Models and Components of NFC Reader/Writer
Source: ResearchInChina
NFC phone’s chip falls into three basic modules: NFC controller, SE security module, and RF
antenna, among which SE security module has functions of safe storage of apps and data, dynamic
download of multiple apps as well as updates and safety algorithm services, etc.
SE security chip matters the division of benefits among vendors. China UnionPay, operators and
mobile phone brands without exception wish to control SE and subsequently control capital
circulation tache and the acquiring settlement rights as well as get consumer data. SE has four
implementation schemes:
(1) Full Card Scheme: NFC chip and SE are integrated into a SIM card. SIM card suppliers and mobile
operators are the beneficiaries, and the SIM cards are issued by the operators;
(2) Full Terminal Scheme: NFC chip and SE are embedded in a mobile phone, and mobile phone vendors are
the beneficiaries;
(3) Smart SD Card Scheme: SE is placed in a SD card. China UnionPay and banks are the beneficiaries, and
they issue SD cards by themselves;
(4) SWP-SIM Scheme: NFC chip and SE are separate, among which SE is integrated in SIM card, while NFC
chip is built in mobile phone.
Generally speaking, full card scheme and SD card scheme are the offspring of operators and
financial institutions at early stage wishing to monopolize the NFC market, and both have been
nearly eliminated so far. SWP-SIM scheme is the result of both sides’ compromises and now
becomes the mainstream for the moment.
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Global and China Mobile Payment Industry Report, 2019-2025
Main Implementations of SE in NFC
Source: China UnionPay; ResearchInChina
4.5.2 Market Size
NFC technology has found trial application in so many fields worldwide. Since China is the world’s
largest mobile phone market and now has more than 1.2 billion mobile phone users, the Chinese
NFC market with greatest potentials keeps expanding in scale.
NFC has already divided into two groups: one is represented by HCE, without SE storage and led
by banks; and the other is represented by Apple Pay, with SE and dominated by mobile phone
vendors. Other NFC applications such as the top-up check of cards are all strengthening the
ecosystem of NFC and raising the user viscosity of consumers.
NFC phone has three main modes including NFC-SD card, NFC-SIM mode and NFC full-phone
mode. The three differ a little in terms of implementation effect, safety, user experience and
technological level, and the difference of the three lies in the different areas in which security chip
is embedded.
Currently, the Pay NFC involves Apple Pay, Samsung Pay, Huawei Pay and MI Pay. It uses the card
simulation mode of NFC and forms special Token number instead of bonding bank card’s complete
information inside mobile phone. In the process of payment, Token is passed via NFC
communication to POS terminal when then transmits Token and transaction value to China
UnionPay and banks in a bid for verification and completion of the deal. In such process, mobile
phone is not required to be connected with the network.
In 2016, China UnionPay launched payment products -- Apple Pay, Samsung Pay, Huawei Pay and
Mi Pay jointly with commercial banks, Apple, Samsung, Huawei and Xiaomi. As of the end of 2016,
Apple Pay had issued 15.949 million cards across the country with 152.478 million transactions
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Global and China Mobile Payment Industry Report, 2019-2025
worth RMB20.43 billion; Samsung Pay had issued 1.148 million cards nationwide with a total of
5.955 transactions valued RMB860 million; Huawei Pay had issued 139,000 cards nationwide, with
1.704 million transactions and a transaction value of RMB40 million; Mi Pay had issued 289,000
cards across the country with 1.968 million transactions and a transaction value of RMB70 million.
In July 2017, Jingdong Flash Pay, an epoch-making innovative payment product for China's NFC
market, was launched by JD Finance and China UnionPay. This eye-catching new mobile payment
product meets the requirements of the quad mode, and technically adopts NFC payment which is
more convenient and safe than QR code payment. As an e-commerce company, Jingdong has a
huge traffic advantage and plays a key role in the promotion of NFC payment. In addition, the
launch of Jingdong Flash Pay also has a great enlightenment on the mobile payment industry -how banks, China UnionPay, payment agencies and e-commerce companies (scenarios) work
together. At present, Jingdong Flash Pay has occupied the first place in the NFC market in China.
To ensure safety, such kind of Pay still needs to be embedded with SE (Secure Element) safety
module for storing Token information. Apple Pay applies TouchID fingerprint identification to read
Token and confirm the deal, while Samsung Pay, Huawei Pay and MI Pay use the electron SE
module, with the principle of realization almost the same.
Apart from Pay type, NFC payment is also done via HCE mode. There is no Android Pay in China,
and such payment is represented by NFC-SIM card and China UnionPay Cloud-based Quick Pass.
NFC-SIM card needs operators to provide special SIM card and collaborate with operators’ wallet
APP for use. China UnionPay Cloud-based Quick Pass is simple in a relative sense, and it can be
used as long as Cloud-based Quick Pass App or a bank’s App is stalled in a mobile phone with NFC
function.
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In aspect of NFC-SIM card, the three leading telecom operators (China Mobile, China Unicom and
China Telecom) have given tacit consent to 4G/5G mobile phone card bonding NFC function. In
2019, 4G and 5G mobile phone shipment in China hit 359 million units and 13.769 million units,
respectively, accounting for 95.8% of the total shipment.
As 4G/5G phone market balloons and mobile phones are accelerating to be replaced, the
bottlenecks of NFC-SIM card will be ultimately smashed. In a word, the hindrances to the
development of NFC payment environment will be gradually eliminated. With the bettering of
payment environment, the focus of mobile payment solutions is geared from industrial end
towards consumer end and to provide the user with higher value.
NFC-enabled Cellphone Models Officially Released in China, 2019
Pay
Model
Apple
Mate Xs, Mate X Mate 30 RS Porsche Design, Mate 30 Pro 5G, Mate 30 5G, Mate 30 Pro, Mate 30, Mate
Pay
20 RS Porsche Design, Mate 20 X 5G, Mate 20 X, Mate 20 Pro, Mate 20, Mate 10 Porsche, Mate 10 Pro,
Mate 10, Mate 9 Porsche, Mate 9 Pro, Mate 9, Mate 8, Mate 7, Mate S P30 Pro, P30, P20 Pro, P20, P10
Plus, P10, P10 Youth version, P8 Youth version ( Telecom 4G version) nova 5 Pro, nova 2s, Maimang 6,
Honor Magic2, Honor Magic, Honor Note 10, Honor V30 Pro, Honor V30, Honor V20 (Full Netcom
version), Honor V10 (Full Netcom version), Honor V9 (Full Netcom version), Honor V8 (Full Netcom
version), Honor 20 Pro, Honor 20, Honor 10, Honor 9 Honor 8, Honor 7 (Full Netcom version), Honor 6
(Advanced Configuration version), Honor 6 Plus (double 4G version)
Samsung
Mate Xs, Mate X Mate 30 RS Porsche Design, Mate 30 Pro 5G, Mate 30 5G, Mate 30 Pro, Mate 30, Mate
Pay
20 RS Porsche Design, Mate 20 X 5G, Mate 20 X, Mate 20 Pro, Mate 20, Mate 10 Porsche, Mate 10 Pro,
Mate 10, Mate 9 Porsche, Mate 9 Pro, Mate 9, Mate 8, Mate 7, Mate S P30 Pro, P30, P20 Pro, P20, P10
Plus, P10, P10 Youth version, P8 Youth version (Telecom 4G version) nova 5 Pro, nova 2s, Maimang 6,
Honor Magic2, Honor Magic, Honor Note 10, Honor V30 Pro, Honor V30, Honor V20 (Full Netcom
version), Honor V10 (Full Netcom version), Honor V9 (Full Netcom version), Honor V8 (Full Netcom
version), Honor 20 Pro, Honor 20, Honor 10, Honor 9 Honor 8, Honor 7 (Full Netcom version), Honor 6
(Advanced Configuration version), Honor 6 Plus (double 4G version)
Huawei
Mate Xs, Mate X Mate 30 RS Porsche Design, Mate 30 Pro 5G, Mate 30 5G, Mate 30 Pro, Mate 30, Mate
Pay
20 RS Porsche Design, Mate 20 X 5G, Mate 20 X, Mate 20 Pro, Mate 20, Mate 10 Porsche, Mate 10 Pro,
Mate 10, Mate 9 Porsche, Mate 9 Pro, Mate 9, Mate 8, Mate 7, Mate S P30 Pro, P30, P20 Pro, P20, P10
Plus, P10, P10 Youth version, P8 Youth version (Telecom 4G version) nova 5 Pro, nova 2s, Maimang 6,
Honor Magic2, Honor Magic, Honor Note 10, Honor V30 Pro, Honor V30, Honor V20 (Full Netcom
version), Honor V10 (Full Netcom version), Honor V9 (Full Netcom version), Honor V8 (Full Netcom
version), Honor 20 Pro, Honor 20, Honor 10, Honor 9 Honor 8, Honor 7 (Full Netcom version), Honor 6
(Advanced Configuration version), Honor 6 Plus (double 4G version)
MI Pay
Mate Xs, Mate X Mate 30 RS Porsche Design, Mate 30 Pro 5G, Mate 30 5G, Mate 30 Pro, Mate 30, Mate
20 RS Porsche Design, Mate 20 X 5G, Mate 20 X, Mate 20 Pro, Mate 20, Mate 10 Porsche, Mate 10 Pro,
Mate 10, Mate 9 Porsche, Mate 9 Pro, Mate 9, Mate 8, Mate 7, Mate S P30 Pro, P30, P20 Pro, P20, P10
Plus, P10, P10 Youth version, P8 Youth version (Telecom 4G version) nova 5 Pro, nova 2s, Maimang 6,
Honor Magic2, Honor Magic, Honor Note 10, Honor V30 Pro, Honor V30, Honor V20 (Full Netcom
version), Honor V10 (Full Netcom version), Honor V9 (Full Netcom version), Honor V8 (Full Netcom
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Global and China Mobile Payment Industry Report, 2019-2025
version), Honor 20 Pro, Honor 20, Honor 10, Honor 9 Honor 8, Honor 7 (Full Netcom version), Honor 6
(Advanced Configuration version), Honor 6 Plus (double 4G version)
Source: ResearchInChina
NFC applied in bus card falls into top-up bus card and mobile phone simulated as a bus card. The
top-up bus card renders the reader mode of NFC. For instance, in Guangzhou city, the NFC phone
can read LingNanTong Bus/Metro card and check the balance via WeChat, Alipay and QQ and
recharge the card.
In recent two years, China Mobile's smart terminal NFC payment accounts for a small proportion
of the total mobile payment transaction scale, but takes relatively high growth. In 2019, the
transaction scale of NFC payment approximated 34.08 billion, taking up less than 1% of mobile
payment.
Since 2017, driven by UnionPay, such intelligent terminal players as Apple pay and Huawei pay
cooperated with some third-party payment organizations such as JD.com Flash Pay and Meituan
flash pay to further strengthen NFC payment promotion.
JD.com Flash Pay has become a leading enterprise in mobile intelligent terminal NFC payment
market relying on the advantages of security, convenience and large discount, and its transaction
scale ranked first , exceeding other third-party payment institutions.
China Mobile NFC Payment Transaction Scale, 2017-2019
70.0%
120
100
55.5%
58.9%
83.6
47.3%
80
59
60
60.0%
95.8
90.2
50.0%
71.2
65.3
40.0%
36.2%
30.0%
43.3
40
20
0
8.5
29.4
17.6% 19.0%
18.5
11.9
10
10.7% 9.0%
7.9%
10.0%
6.2%
2017Q1 2017Q2 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4
Transaction Scale (RMB 100 mln)
Transaction Scale
20.0%
17.4%
0.0%
QoQ growth(%)
2017Q1
2017Q2
2017Q3
2017Q4
2018Q1
2018Q2
2018Q3
2018Q4
2019Q1
2019Q2
2019Q3
2019Q4
8.5
10
11.9
18.5
29.4
43.3
59
65.3
71.2
83.6
90.2
95.8
17.6%
19.0%
55.5%
58.9%
47.3%
36.2%
10.7%
9.0%
17.4%
7.9%
6.2%
(RMB 100 mln)
QoQ growth(%)
Source: ResearchInChina
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Global and China Mobile Payment Industry Report, 2019-2025
4.5.3 Presence of Enterprises
Global NFC market trade involves the players like Broadcom, Infineon, MasterCard, NXP, Paypal,
Softcard, and VISA. Besides, there are important participants in the NFC market, including
American Express, Gemalto, Google, Inside Secure, Nokia, Qualcomm, Renesas Electronics,
Samsung Electronics and ST.
Chinese NFC industry chain contains chip vendors, card issuers, TSM platform operators, NFC
antenna and magnetic disk plants. NFC hardware suppliers consist of Shenzhen Xinguodu
Technology and Newland Group; the NFC-SIM card suppliers include Wuhan Tianyu Information
Industry Co., Ltd., Hengbao Co., Ltd and Eastcompeace Technology Co., Ltd; and NFC antenna
suppliers comprise Huizhou Speed Wireless Technology Co., Ltd and Shenzhen Sunway
Communication Co., Ltd.
NFC Payment Industry Chain
Source: ResearchInChina
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Global and China Mobile Payment Industry Report, 2019-2025
Process of NFC Payment
Source: NFC; ResearchInChina
4.5.4 HCE Cloud-based QuickPass
Cloud-based Quick Pass is a kind of payment means on the basis of smart phone and NFC HCE and
Token technologies.
Adopting HCE technology and without the need to add hardware device to mobile phone, the
Cloud-based Quick Pass can help you quickly finish payment only NFC function of mobile phone is
opened whilst waving by the acceptance terminal. HCE Cloud-based Quick Pass also has the
function of online payment and only supports Android platform.
The “Cloud QuickPass”, jointly launched by China UnionPay, mobile phone vendors and commercial
banks in 2015, has developed 20 million users and 10.5 million terminals supporting Quick Pass in
its first year.
As of the end of 2016, Cloud QuickPass HCE products had successfully issued 668.2 cards, with
29.188 million transactions and a transaction value of RMB430 million; a total of 93 banks
including Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China,
China Construction Bank and China Merchants Bank had officially opened the "Cloud QuickPass"
business and issued a total of 220,000 cards.
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Global and China Mobile Payment Industry Report, 2019-2025
The explosive growth was expected in 2017, mainly reflected in:
(1) The active participation of mobile phone vendors. HCE, Apple Pay, Huawei Pay, Mi Pay, etc. emerged;
(2) The quick joining of commercial banks;
(3) The enthusiasm of customers. Customers can integrate and change their payment methods through Cloud QuickPass
safely and quickly, which is a trend of the new era and a means to improve their quality of life.
Installation of Cloud QuickPass
Source: China UnionPay; ResearchInChina
Development History of Cloud-based QuickPass in China, 2015-2019
Date
Event
Dec 12, 2015
China UnionPay associated over twenty commercial banks to roll out “Cloud-based Quick Pass” jointly in Beijing,
ushering in an era of safer and more convenient mobile payment.
Dec 15, 2015
UnionPay International is pacing up to expand the coverage of Quick Pass overseas, and it has opened 100,000 POS
terminals (reception of Quick Pass) in Hong Kong, Macao and Taiwan, South Korea, Australia, Singapore, etc.; and
all these POS terminals support the “Cloud-based Quick Pass” latest released by UnionPay.
Feb 18, 2016
UnionPay Cloud-based Quick Pass officially opened service to support Apple Pay. The card holders in domestic China
can easily add their UnionPay card to iPhone, Apple Watch and iPad, and they can pay more easily and safely.
Mar 29, 2016
China UnionPay associated with several commercial banks and Samsung Electronics and jointly announced
Samsung Pay loaded with UnionPay Cloud-based Quick Pass had been officially available online.
Jun 27, 2016
UnionPay International, Korean KT Group and its subsidiary BC Card Company jointly announced that UnionPay Int’l
would roll out UnionPay HCE Cloud-based Quick Pass product first in South Korea, and the local UnionPay card
holder can pay via “Cloud-based Quick Pass”.
Aug 16, 2016
UnionPay International announced it that a group of Canadian merchants in daily necessities opened the UnionPay
Cloud-based Quick Pass acquiring service. Such innovative service first extended to North America.
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Global and China Mobile Payment Industry Report, 2019-2025
Aug 17, 2016
UnionPay International and Industrial and Commercial Bank of China (ICBC) jointly announced to issue UnionPay
HCE Cloud-based Quick Pass product in Macao, China.
Aug 31, 2016
China UnionPay joined hands with Huawei and more than 20 commercial banks to hold a press conference and
announce that UnionPay Cloud-based Quick Pass would fully support Huawei Pay.
Sep 1, 2016
China UnionPay associated with nearly 20 commercial banks and Xiaomi to jointly announce UnionPay Cloud-based
Quick Pass officially opened service to support MI Pay.
Feb 21, 2017
China UnionPay International announced to launch "Cloud QuickPass" in Hong Kong for the first time in
collaboration with Bank of China (Hong Kong)
May 4, 2017
The largest supermarket chain in Australia, Woolworths, enabled all of its supermarkets in Australia to accept
"Cloud QuickPass"
Jul 2017
The epoch-making innovative payment product in Chinese NFC market - Jingdong Flash Pay debuted
Sep 7, 2017
China UnionPay Cloud QuickPass announced to support Didi
Oct 26, 2017
China UnionPay, together with other companies, realized a full range of payment methods including UnionPay
mobile QuickPass, UnionPay QR codes and UnionPay IC card flash payment in high-speed rail trains for the first
time.
Nov 10, 2017
Hong Kong taxis started to accept China UnionPay cards issued worldwide. When taking taxis with the UnionPay
logo, cardholders can pay for the taxi fares by using UnionPay cards or via UnionPay mobile QuickPass.
Dec 5, 2017
The mobile App “China UnionPay Wallet” was changed into "Cloud QuickPass". The original related businesses and
functions of "China UnionPay Wallet" were merged into Cloud QuickPass.
Nov.2018
China UnionPay announced that the users of Cloud Flash Pay APP exceeded 100 million
Sept.5, 2019
China UnionPay announced that the users of Cloud Flash Pay APP exceeded 200 million
Source: China UnionPay; ResearchInChina
At present, the seven mainstream mobile phone brands including Huawei, Xiaomi, OPPO, vivo,
MEIZU, Apple and Samsung support UnionPay mobile phone flash payment.
Mobile Phone Flash Payment Products Supporting UnionPay Mobile Phone Flash
Payment
Source: China UnionPay; ResearchInChina
4.6 Biometric Identification Payment
Currently, the most common biometric identification technologies on the market include
fingerprint scanning, facial recognition, voice recognition and iris scanning.
In 2017, face scan payment emerged and developed. In May 2017, Baidu launched a face scan
payment product at its own canteen. At the end of August, JD Home (the experience store under
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Global and China Mobile Payment Industry Report, 2019-2025
Jingdong) began to test the "face scan payment" function internally. On September 1, Alipay
announced the commercial release of "face scan payment" in KFC’s KPRO Restaurant officially. In
November, Apple's latest iPhone X completely abandoned the fingerprinting technology, while it
introduced the more mature face recognition technology.
In addition, the head office of Agricultural Bank of China has issued a circular calling for nationwide
promotion to face recognition systems, covering 24,064 branches, 30,089 teller machines and
100,000 ATMs across the country.
As of the end of 2019, the users of face scan payment in China estimated at 110 million, the major
application scenarios include supermarket, convenience store, shopping mall, AVM, and food and
beverage consumption in shops, etc.
Along with the popularization of face scan payment, the corresponding equipment market also
develops. However, China's face scan payment equipment has been upgraded to enter red sea in
recent two years, price competition makes the market enter a more brutal stage of competition.
Development of Chinese Face Payment Equipment
Time
Event
Aug. 2018
Alipay announced that in the next year it will popularize the solution of self-service
cash register and face scan payment to various business scenarios. The price of
each self-service cash register device added with face scan payment is about
30,000 to 40,000 yuan, suitable for large-scale retail, but the price is difficult to
accept for medium and long-tail merchants.
Dec. 2018
Alipay launched lightweight face scan payment device-Dragonfly, which decreased
face scan payment access cost by 80%. Since then, face scan payment
popularization is possible, but the price 2599 yuan is still relatively high.
Mar. 2019
WeChat launched lightweight face scan payment device-Frog, which priced at
2,000 yuan.
Apr. 2019
Alipay launched the second face scan payment device Dragonfly based on offline
consumption scenario, which priced at 1,999 yuan, 30% less than the first
generation.
Aug. 2019
WeChat payment released double-sided screen intelligent commercial equipment
with code sweeper WeChat Frog Pro, which priced at 1999 yuan. Except subsidy,
the prices of the two major Internet giants' face scan payment equipment are at
the same starting line, but this did not last long.
Sep.24, 2019
Alipay launched Dragonfly Plus all-in-one and Dragonfly Extension separate type,
and reduced the price of ordinary Dragonfly to 1,699 yuan. In addition, if the
service provider takes the goods in bulk, the price can be reduced to 1499 yuan.
Source: ResearchInChina
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Global and China Mobile Payment Industry Report, 2019-2025
Development Trend of No-cash Society in China
Source: iResearch; ResearchInChina
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Global and China Mobile Payment Industry Report, 2019-2025
5. Mobile Payment Users in China
5.1 Overview
The research on mobile payment users can reflect the application status of mobile payment
business to some extent. According to the survey of Payment & Clearing Association of China in
2018, concrete research is conducted in terms of user essential attributes, preferences and
satisfaction. Main characteristics are as follows:
In terms of user essential attributes, male users are more than female users, and there is a
significant increase in the proportion of male users. In 2018, male users accounted for 60.6%, up
from 78.4% in 2017. Young and middle-aged users played a main role, the users aged 31-40
accounted for 28% in 2018, up from 14.4% in 2017.
The regional distribution of users in 2018 was uneven. Compared with 2017, the proportion of
users in municipalities directly under the central government and provincial capitals declined,
while the proportion of users in prefecture-level cities, county regions, towns and villages
increased, which showed that China mobile payment was gradually permeating from developed
cities to prefecture-level cities and towns.
With respect to user behaviors, mobile payment users preferred small-amount and high-frequency
payment in 2018. 72.6% of them spent less than RMB500 on a single charge, and 80.1% of users
used mobile payment every day.
Easy operation constitutes the main reason for users choosing mobile payment, but potential
safety hazard and slow mobile phone network access speed are the most primary concerns for
users.
About the survey on new technologies of mobile payment, users have relatively high recognition
for new technologies of mobile payment, which is advantageous to the promotion and
development of mobile payment. 85.0% of users can accept the use of biometric technology for
mobile payment identification and transaction verification, which indicated users have high
acceptance of new mobile payment technologies.
5.2 Characteristics of Mobile Payment Users
* Male users are more than female users, but the proportion of female users jumps greatly
With the increasingly diversified application scenarios and the continuous improvement of safety,
some prudent female users begin accepting and using mobile payments.
In 2018, male and female users accounted for 60.6% and 39.4% of total mobile payment users,
while the number in 2017 was 52.3% and 47.7% respectively. The results of the two-year survey
were similar, male users outnumber female users, proportion of female users declined slightly in
2018, which showed male users were more willing to try innovative payment products than female
users.
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Global and China Mobile Payment Industry Report, 2019-2025
Mobile Payment Users Structure in China by Gender, 2017-2018
Source: Payment & Clearing Association of China, ResearchInChina
In 2018, the number of mobile payment users aged under 30 was the largest, accounting for
54.22%. Users aged 31-40 followed with proportion of 27.6%. The proportion of users aged 41-50
and over 51 was 13.3% and 5% respectively. Compared with 2017, the proportion of mobile
payment users aged under 30 dropped significantly.
Mobile Payment Users Structure in China by Age, 2017-2018
Source: Payment & Clearing Association of China, ResearchInChina
In 2018, mobile payment users with bachelor's degree or below ranked first, accounting for 94.1%.
The number of users with master's degree ranked second, accounting for 52%. The proportion of
users with doctor's degree or above was 0.7%. Compare with 2017, the proportion of
undergraduate and below users increased slightly, while the proportion of postgraduate users
decreased slightly, doctor and above users remained basically unchanged.
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Global and China Mobile Payment Industry Report, 2019-2025
Educational Background of Mobile Payment Users in China, 2017-2018
Source: Payment & Clearing Association of China, ResearchInChina
In 2018, the mobile payment users in prefecture-level cities accounted for 311%, being the most;
provincial capitals followed with share of 28.2%; the proportion of users in prefecture-level cities,
county regions, townships and countryside was 15.7%, 16.6%, 5.5% and 3.0%, respectively.
Compared with the proportion of mobile payment users in 2017, the gap between urban and rural
areas in 2018 slightly decreased. With the increasingly rich application scenarios of mobile
payment, continuously improved security, rural payment environment continuously optimized.
Along with the promotion of inclusive finance coverage, other prudent groups have begun to
accept and use mobile payments, also with the gradual improvement of income level and the
internal demand for convenient payment methods, the proportion of users in county regions and
townships rises.
Distribution of Mobile Payment Users in China by Region, 2017-2018
Source: Payment & Clearing Association of China, ResearchInChina
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Global and China Mobile Payment Industry Report, 2019-2025
In 2018, mobile payment users in East China and North China took up 27.3% and 25.7%
respectively; South China followed with 20.1%; Southwest, Central China, Northwest and
Northeast accounted for 9.5%, 7.1%, 5.5% and 4.5%. Hong Kong, Macao and Taiwan and other
regions ranked last with less than 1% of users. This indicated most domestic mobile payment
users are located in developed regions such as Beijing, Tianjin, Hebei, Yangtze River Delta, Pearl
River Delta and other populated areas, which was closely related to developed economy, high per
capita income, large resident population and relatively perfect environment for accepting mobile
payment in these regions.
Distribution of Mobile Payment Users in China by Region, 2017-2018
4.5%
0.3%
5.5%
9.5%
27.3%
7.1%
20.1%
25.7%
East China
North China
South China
Central China
Southwest
Northeast
Northwest
HK, Macao, Taiwan and other regions
Source: Payment & Clearing Association of China, ResearchInChina
5.3 Using Behaviors of Mobile Payment Users
In 2018, user frequency continued to increase, with 80.1% of users using mobile payments every
day, 1.4 percentage points higher than 2017. Users who used mobile payment 2-3 times a week
accounted for 14.4%. Users using mobile payment 1 time a week took up 2.0%, once half a month
and once a month shared 1.4% and 1.2%. 1.0% of users did not often use mobile payment. This
indicated the application scenario and business environment of mobile payment were becoming
more and more mature, and mobile payment methods were more and more popular with users.
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Global and China Mobile Payment Industry Report, 2019-2025
Frequency of Mobile Payment by Users in China, 2017-2018
Longer
1.0%
0.8%
Once a month
1.2%
0.8%
Once half a month
1.4%
1.0%
Once a week
2.0%
1.8%
2-3 times a week
14.4%
17.0%
80.1%
78.7%
Use everyday
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0%
2018
2017
Source: Payment & Clearing Association of China, ResearchInChina
In 2018, the amount per payment of 43.16% uses were below 100 yuan; 29.48% users
RMB100-500, basically the same as 2017 and changed not much. 13.4% users paid per payment
500-1000yuan, down 1.4% yr-on-yr. 13.96% users paid over 1000yuan, up 1.36% over 2017. It
can be seen that on the whole, mobile payment was still dominated by small amount and
convenient in 2018, the proportion of all interval data was almost the same as that in 2017.
Amount Per Payment of Mobile Payment Users in China, 2017-2018
50.0%
45.0%
43.0%43.2%
40.0%
35.0%
29.5%29.5%
30.0%
25.0%
20.0%
15.0%
14.8%13.4%
12.6%14.0%
50-1000 yuan
Above 1000 yuan
10.0%
5.0%
0.0%
Below 100 yuan
100-500 yuan
2017
2018
Source: Payment & Clearing Association of China, ResearchInChina
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Global and China Mobile Payment Industry Report, 2019-2025
In 2018, users commonly used debit card and third-party payment accounts for mobile payments,
sharing 70.6% and 66.4%, respectively. Users who use credit payment products such as Ant
Credit Pay and Jingdong White Stripes to make payments followed with share of 49.9%. User who
chose credit card for mobile payment took up 42.6%. 39.9% of users adopted monetary market
funds to make mobile payments, such as Yu 'e Bao WeChat Coin Pass, etc; proportion of users who
chose class II and class III bank accounts for mobile payment was 12.9%; there was 3.4% users
taking other accounts for mobile payment.
Account Type Structure Used by Mobile Payment Users, 2018
80.0%
70.6%
70.0%
66.4%
60.0%
50.0%
49.9%
42.6%
39.9%
40.0%
30.0%
20.0%
12.9%
10.0%
0.0%
3.4%
Credit card Debit card Class II and Third-party Credit
class III
payment payment
bank
account
products
accounts
Money
Market
Fund
Others
Source: Payment & Clearing Association of China, ResearchInChina
In 2018, the primary reason why users were willing to use mobile payment was that the operation
was simple and convenient, accounting for 95.6%, on a par with that in 2017; the reason that no
need to bring cash and bank cards ranked second with proportion of 80.8%, down over 2017; the
reason of many preferential promotion activities took the third place with users share of 47.3%.
The reason of being supported by merchants and high security had basically the same influence,
with share of 34.5% and 33.0%, down obviously over 2017. In addition, 3.2% users chose mobile
payment for other reasons. This indicated users paid more attention to the convenience of
operation when choosing mobile payment, the process was simple without change or bank card
presentation, which reduced the time cost of users.
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Global and China Mobile Payment Industry Report, 2019-2025
Main Reasons for Using Mobile Payment in China, 2018
Others
3.2%
4.8%
33.0%
40.5%
High security
80.8%
No need to bring cash and bankcard
34.5%
Supported by merchants
56.3%
47.3%
Many preferential promotion activities
91.2%
64.5%
95.6%
97.8%
Easy and convenient operation
0.0%
20.0%
2018
40.0%
60.0%
80.0%
100.0%
120.0%
2017
Source: Payment & Clearing Association of China, ResearchInChina
Most users considered that mobile payment will coexist with cash.
Proportion of Users Expecting Mobile Payment Development, 2018
23.93%
49.78%
4.32%
21.97%
Yes
No
Be replaced gradually
Coexist
Source: Payment & Clearing Association of China, ResearchInChina
In 2018, security risks and slow speed of mobile phone network access were the most worrying
problems for mobile payment users, accounting for 64.7% and 53.4% respectively. The third
problem was merchants did not support it, sharing 49.8%, down nearly 20 percentage points. The
problem that payment process was complicate to operate ranked fourth, accounting for 27.1%;
low limit and failed payment took up 19.7% and 17.5%, respectively; users that worried about the
opening was tedious shared 13.7%; problem that users are less worried about was that the high
cost of Internet traffic accounted for 10.0%.
93
Global and China Mobile Payment Industry Report, 2019-2025
This indicated through the publicity and education of market subjects and the active learning of
users, users paid more attention to the security of mobile payment and their awareness of account
funds security was obviously improved. Through the continuous efforts of market players, the
mobile payment application scenario and acceptance environment have been further improved,
can better support users to use mobile payment.
Problems with Usage of Mobile Payment by Users in China, 2017-2018
Others
Internet traffic costs high
Low limit
4.2%
0.0%
10.0%
4.5%
19.7%
3.5%
49.8%
Not supported by merchants
69.6%
27.1%
22.4%
The payment process is complicated to operate.
53.4%
54.1%
Mobile phone network speed is slow
17.5%
15.7%
13.7%
8.2%
Failed payment
The opening is tedious
64.7%
59.0%
Existing security risks
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0%
2018
2017
Source: Payment & Clearing Association of China, ResearchInChina
In 2018, users believed that the first security problem encountered in the payment process was
the disclosure of personal information, sharing 81.0%; the second was mobile phone scanned
false barcode, sharing 70.1%; the third was accounts fund embezzled, accounting for 67.5%. The
last was payment code was sent to others, occupying 41.2%. This showed in addition to paying
attention to the safety of their own account funds, users also increased awareness of protecting
personal privacy information. It was necessary for the majority of market players to strengthen
the protection of user sensitive information while providing mobile payment services, establish a
sound management mechanism in line with regulatory safety in the information collection,
processing, storage, use and other links.
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Global and China Mobile Payment Industry Report, 2019-2025
Proportion of Security Problems Encountered by Mobile Payment Users, 2018
90.0%
80.0%
70.0%
81.0%
70.1%
67.5%
60.0%
50.0%
41.2%
40.0%
30.0%
20.0%
10.0%
0.0%
Mobile phone scans The payment code is
false barcodes
sent to others
Merchant funds
embezzled
Personal information
is leaked
Source: Payment & Clearing Association of China, ResearchInChina
In 2018, difficult operation & poor experience and few supported merchants were the most
common problems when users use mobile banking and other methods to make payments, sharing
52.2% and 50.2%; Less publicity, little knowledge of bank payment products, less marketing
activities accounted for 39.4% and 37.5%. Less function, donot know which bank’s app (client
terminal) friends are using shared 34.3% and 29.2%. Therefore, banks needed to optimize
operation process of mobile payment business and actively expand payment application scenarios,
increase the publicity of their own products and services, add business function modules to
enhance their attractiveness and influence to users.
Proportion of Problems Mobile Payment Users Think to Solve in Client Terminals, 2018
10.3%
34.3%
29.2%
39.4%
Less function
52.2%
37.5%
50.2%
Difficult operation and poor experience
Less merchants are supported
Less marketing activities
Less publicity, little knowledge of bank mobile payment products
Don't know which bank's app (client) friends are using.
Others
Source: Payment & Clearing Association of China, ResearchInChina
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In 2018, in terms of mobile payment security and customer rights protection measures, users
mostly expected market players to conduct payment risks reminder in time and unblock customer
complaint channels, sharing 79.2% and 59.6%; the second was to carry out necessary safety
education for customers and add transaction verification links(e.g. enter SMS verification code
received by mobile phone during payment), sharing 55.3% and 52.3%; the last was transaction
limit management, accounting for 38.7%. It indicated market players should protect users' right
to know so that they can fully understand the potential risks in the payment process when
providing mobile payment service; should improve customer service quality by improving
customer complaint channels such as telephone, online customer service and emails, etc;
continuously strengthen safety education for customers to improve customer risk prevention
ability and level; provide multi-level security authentication tools to help customers reduce risk
probability and capital loss.
Proportion of Customer Rights Protection Measures Expected by Mobile Payment Users,
2018
8.0%
38.7%
55.3%
52.3%
79.2%
Carry out necessary safety education for customers
59.6%
Prompt reminder of payment risks
Clear up customer complaint channels
Add transaction verification links (e.g. enter SMS verification code received by mobile
phone during payment)
Source: Payment & Clearing Association of China, ResearchInChina
In 2018, users believed that security ranked first in the areas where mobile payment needed to be
improved most in the future, sharing 77.8%; application scenario scope ranked second with share
of 65.2%, down over 2017; service quality and convenience followed with share of 46.7% and
43.4%; payment limits and others accounted for 33.4% and 5.7%.This showed users paid more
attention to the security of mobile payment and also the continuous improvement of service
quality and payment experience.
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Global and China Mobile Payment Industry Report, 2019-2025
Proportion of Problems Mobile Payment Users Concerned, 2018
5.7%
6.1%
Others
33.4%
29.7%
Payment limit
65.2%
70.7%
Application scope
Service quality
46.7%
36.0%
Convenience
32.0%
43.4%
Security
67.5%
0.0%
10.0%
20.0%
30.0%
2018
40.0%
50.0%
60.0%
70.0%
77.8%
80.0%
2017
Source: Payment & Clearing Association of China, ResearchInChina
Analysis of Network Consumption Period, 2018
Source: China Telecom, ResearchInChina
97
90.0%
Global and China Mobile Payment Industry Report, 2019-2025
5.4 Attributes and Behavior Preferences of Mobile Payment Users
In 2018, 99.1% of users said that they used mobile payment most often in financial situations
such as purchase of financial products, stock and securities, an increase of nearly 60% compared
with 2017; followed by lifestyle, such as buying daily necessities for food and clothing etc.,
accounting for 97.2%, which was basically the same as in 2017; public utilities expenditure ranked
third, accounting for 68.2%, an increase of 6.7% from 2017; ticketing payment ranked fourth,
accounting for 67.0%; the users who used mobile payment in business travel and entertainment
downloading scenarios account for 64.1% and 46.7% respectively. Finally, users using other
mobile payment scenarios accounted for 16.7%. The above data shows that mobile payment has
been widely used in all aspects of daily life, and has played an increasingly important role, fully
satisfying the basic living needs of users such as clothing, food, housing, and transportation, as
well as value-added services such as financial management, tourism and entertainment
consumption.
Major Industries to Which Mobile Payments Are Applied, 2018
Source: Payment & Clearing Association of China, ResearchInChina
In 2018, 89.5% of users indicated that they most often used client-side code scanning or QR codes
for payments; paying users used quick pass on terminal devices (such as bank cards, Apple Pay,
Huawei Pay, Mi Pay and other mobile quick pass) ranked second, accounting for 27.2%; 23.7% of
users chose to jump from the merchant client to a third-party client for payment, ranking third;
and 8.4% of users used other payment methods, such as mobile phones web payment, reply SMS
payment, call hotline payment etc.
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Global and China Mobile Payment Industry Report, 2019-2025
Payment Methods of Mobile Payment in China, 2018
100.0%
89.5%
90.0%
80.0%
70.0%
60.0%
50.0%
40.0%
27.2%
30.0%
23.7%
20.0%
8.4%
10.0%
0.0%
Barcode payment
Quick pass
Jump to third party
client terminal for
payment
Others
Source: ResearchInChina
In 2018, 89.1% of users were able to accept barcode payment, while 10.9% of users chose not to
accept it, which was the same as the acceptance in 2017. This shows that through the active layout
and cultivation of market subjects for many years, usage and acceptability of barcode payment
methods has reached a high level.
Proportion of Users Aaccepting Barcode Payment, 2018
Source: ResearchInChina
The most commonly used barcode payment scenarios by users are supermarkets, accounting for
89.5%; followed by convenience stores or chain stores, accounting for 71.7%; restaurants ranked
third, accounting for 68.1%; cinema and vending machine scenarios accounted for 35.6% and
38.4% respectively; users who used barcodes for other occasions accounted for 16.2%; users who
did not use barcodes accounted for 5.7%. It indicates that the barcode payment is mainly used in
the daily consumption scenarios of residents, which better meets the basic consumer needs such
as shopping and eating.
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Global and China Mobile Payment Industry Report, 2019-2025
Barcode Pay Scenarios of Chinese Mobile Payment Users, 2017-2018
Not use
Others
5.7%
3.9%
16.2%
19.4%
38.4%
48.0%
AVM
35.6%
Cinema
49.9%
31.2%
Public bus
71.7%
80.3%
Convenience Store or Chain Store
68.1%
77.7%
Restaurant
89.5%
92.0%
Supermarket
0.0%
20.0%
2018
40.0%
60.0%
80.0%
100.0%
2017
Source: Payment & Clearing Association of China, ResearchInChina
In 2018, scanning QR codes was the most common method used by mobile payment users when
taking the subway, accounting for 39.47%; followed by mobile phone (NFC) payment, accounting
for 33.37%; the proportion of users using public transportation or bank cards was 23.05%,
ranking third; another 4.1% of users chose other methods of payment.
Proportion of Payment Methods Used by China Mobile Payment Users to Take Public
Transportation, 2018
Source: Payment & Clearing Association of China, ResearchInChina
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Global and China Mobile Payment Industry Report, 2019-2025
In 2018, ETC payment was the most preferred payment method for mobile payment users in
high-speed payment scenarios, accounting for 50.9%; followed by license plate recognition
payment, accounting for 31.9%; parking scan payment and cash payment were equally popular,
accounting for 9.7% and 7.5% respectively. The data shows that in high-speed traffic scenarios,
users are more inclined to use an automated payment model with simple, high efficiency, and time
saving process.
Proportion of Payment Methods Used by China Mobile Payment Users for High Speed
Payment, 2018
Cash payment
Parking scan payment
7.5%
9.7%
License plate recognition payment
31.9%
ETC payment
0.0%
50.9%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
Source: Payment & Clearing Association of China, ResearchInChina
In 2018, 61.7% of users expressed their understanding of the bar code payment limit according to
the risk prevention ability of the implementation of the policy of tiered management. For use of
static bar code, the cumulative transaction amount of a single customer’s single bank account or
all payment accounts should not exceed RMB 500 per day; the proportion of users who understood
the policy of “T+0 redemption withdrawal business” of a single money market fund held by a single
investor in a single sales channel with the withdrawal amount set no higher than RMB 10,000 was
the same as that of non-bank payment institutions with the network payment disconnection
accounted for 40.4% and 39.7% respectively; 27.7% of users expressed their understanding of
the policy of gradually increasing the proportion of the central deposit of payment institutions’
customer reserves and achieving 100% centralized deposit by January 14, 2019.
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Global and China Mobile Payment Industry Report, 2019-2025
Proportion of China Mobile Payment Users Knowing about Mobile Payment Policies,
2018
70.0%
61.7%
60.0%
50.0%
40.4%
40.0%
39.7%
27.7%
30.0%
20.0%
10.0%
0.0%
Break direct
connection
Barcode payment
The daily T+0
Centralized custody
limit hierarchical redemption amount of reserve funds
management
is not more than
10,000 yuan
Source: Payment & Clearing Association of China, ResearchInChina
In 2018, users ranked first in understanding of fingerprint recognition technology, accounting for
93.0%, and second was facial recognition technology, accounting for 80.7%; understanding of
acoustic wave and iris recognition technology ranked third and fourth, accounting for 24.7% and
24.1% respectively; the lowest level of understanding was vein recognition technology,
accounting for 4.2%; in addition, 3.5% of users said they did not understand any biometric
technologies. Compared with 2017, the application scope of face recognition technology has been
further expanded, and it has become the mainstream verification method for scenarios such as
mobile phone unlocking, user identity verification, and PAY payment. And user’s understanding
towards it has also further increased. Fingerprint recognition still ranks first in user’s
understanding. The application of sound wave and iris recognition needs to be further promoted.
Mobile Payment Users’ Awareness of New Mobile Payment Technologies in China,
2017-2018
Not know
3.5%
3.5%
24.1%
27.1%
Iris
Vein
4.2%
5.4%
24.7%
24.8%
Sound wave
Face
70.1%
80.7%
93.0%
94.3%
Fingerprint
0.0%
20.0%
40.0%
2018
60.0%
80.0%
100.0%
2017
Source: Payment & Clearing Association of China, ResearchInChina
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Global and China Mobile Payment Industry Report, 2019-2025
In 2018, 85.0% of users were able to accept the use of biometric recognition technology for mobile
payment identification and transaction verification, a slight improvement from 2017, while 15.0%
of users chose not to accept. This shows that biometric recognition technology has been used as
a means of mobile payment identification and transaction verification for many years. It has
experienced enough observation period and has been recognized by market players and users to
a certain extent.
Mobile Payment Users’ Acceptance of Biometric Recognition Technology in China,
2017-2018
Source: Payment & Clearing Association of China, ResearchInChina
In 2018, when users used biometrics for mobile payment identification and transaction verification,
the primary concerns were still personal privacy leakage and potential security risks, accounting
for 73.8% and 67.3% respectively, in consistent with the data of 2017; in addition, the proportion
of problems such as payment failures and complex payment link operations had decreased,
accounting for 30.6% and 27.3%, respectively; but the proportion of users who believed that
merchants did not support and activation process was cumbersome had increased slightly,
accounting for respectively 34.6 and 22.9%. It shows that mobile payment users pay more
attention to the security of personal biometric information. While using the relevant services of
market subjects, they also eagerly hope that relevant parties strengthen the protection of their
sensitive information to prevent information leakage or other illegal purposes.
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Global and China Mobile Payment Industry Report, 2019-2025
Comparison of Users' Concerns in Mobile Payment Using Biometrics in China, 2018
Others
5.6%
Not supported by merchants
34.6%
21.1%
30.6%
32.6%
The payment process is complicated to operate.
27.3%
30.7%
Payment failure
22.9%
19.4%
The opening is tedious
67.3%
70.2%
Security threat
73.8%
77.1%
Personal privacy disclosure
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0%
2018
2017
Source: Payment & Clearing Association of China, ResearchInChina
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6. Mobile Payment-related Industry Chain
6.1 Mobile Netizens
As of June 2017, the number of netizens in China reached 7510 million, an increase of 19.92
million or 2.7% within half a year. The Internet penetration rate was 54.3%, up 1.1 percentage
points from the end of 2016.
As of June 2017, the number of mobile netizens in China reached 724 million, an increase of 28.3
million from the end of 2016. 96.3% of netizens use mobile Internet, in contrast to 95.1% at the
end of 2016, mobile phone holds dominant position among Internet devices. In H1 2017, the
number of users of all types of mobile Apps was on the rise with more diversified scenarios.
Particularly, the number of take-away App users grew the most rapidly to 274 million, an increase
of 41.4% over the end of 2016; there were 502 million mobile payment users, of whom 463 million
ones applied mobile payment to offline scenarios.
As of December 2018, there had been 829 million netizens in China, a 59.6% of its population and
an increase of 3.8 percentage points or 56.53 million netizens from the end of 2017. Moreover,
there were 817 million mobile netizens in China, sharing 98.6% of total netizens in the country.
Netizen Scale in China, 2015-2025E
million
2015
2016
2017
2018
2019E
2020E
2021E
2022E
2023E
2024E
2025E
The Number of Internet Users
688.3
731.3
772.0
828.5
876.4
921.3
971.4
1025.7
1082.0
1143.1
1200.0
50.3%
53.2%
55.8%
59.6%
62.8%
66.0%
69.6%
73.5%
77.5%
81.9%
86.0%
Internet Penetration
Source: CNNIC, ResearchInChina
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Global and China Mobile Payment Industry Report, 2019-2025
Mobile Netizens in China, 2015-2025E
million
2015
2016
2017
2018
2019E
2020E
2021E
2022E
2023E
2024E
2025E
Number of Mobile Netizens (million)
619.8
695.7
752.7
816.98
865.1
909.5
961.2
1014.7
1070.5
1131.4
1189.6
Proportion of Mobile Netizens in Total Netizens
90.1%
95.1%
97.5%
98.6%
98.7%
98.7%
98.9%
98.9%
98.9%
99.0%
99.1%
Source: CNNIC, ResearchInChina
As of December 2018, the number of mobile payment users registered 583 million in China with an
annual growth rate of 10.7%; the use ratio of mobile-terminal online payment was up to 71.4%.
When purchasing products and services offline, the proportion of netizens who use online payment
rose from 65.5% at the end of 2017 to 67.2%. As concerns cross-border payment, Alipay and
WeChat Pay had services available in at least forty countries and regions, and Chinese companies
operated the local digital wallet products in nine Asian countries.
% of Mobile-terminal Online Payment Transactions in China, 2017-2018
Source: CNNIC, ResearchInChina
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Global and China Mobile Payment Industry Report, 2019-2025
6.2 Consumer Terminal Devices
Nowadays, the global smartphone industry is quite mature and the users’ desire to replace their
phones is not so strong under the gloomy economies worldwide, causing a 1.3% year-on-year
drop in smart phone shipments to about 1,413 million units in 2019. With the roll-out of 5G phones,
the global smartphone shipment is expected to edge up in the upcoming several years and reach
1,473 million units in 2025.
Global Smartphone Shipment, 2015-2025E
15.2
4.0%
15.07
15
3.0%
14.88
14.8
14.6
14.4
14.4
14.35
14.31
14.6
14.52
14.46
14.67
2.0%
14.73
1.0%
0.0%
-1.0%
-2.0%
14.13
14.2
-3.0%
14
-4.0%
13.8
13.6
-5.0%
2015 2016 2017 2018 2019 2020E 2021E 2022E 2023E 2024E 2025E
Shipment (100 mln units)
Shipment (100 mln units)
YoY (%)
-6.0%
YoY(%)
2015
2016
2017
2018
2019
2020E
2021E
2022E
2023E
2024E
2025E
14.4
14.88
15.07
14.31
14.13
14.35
14.46
14.52
14.6
14.67
14.73
3.3%
1.3%
-5.0%
-1.3%
1.6%
0.8%
0.4%
0.6%
0.5%
0.4%
Source: Strategy Analytics, ResearchInChina
Global NFC-enabled Mobile Phone Shipments, 2015-2018
Source: ResearchInChina
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Global and China Mobile Payment Industry Report, 2019-2025
6.3 Intelligent POS Machine
6.3.1 Overview of Products
By the means of communication between POS terminals and banks & UnionPay, POS terminals fall
into fixed and mobile POS terminals. Through the communication with banks, UnionPay and other
trading systems via mobile network, mobile POS terminals are not restricted by cable lines and
space, and can be portable for bank card transactions in real time at any place where wireless
communication signals are available, which reduces the risk of cash carrying and cash transactions
as well as makes transactions faster. With the penetration of POS terminals to small and micro
merchants, tobacco, express delivery and utilities, the market demand for mobile POS will grow
faster than fixed POS.
As for application, mobile payment has become a convenient and fast payment model penetrating
to the offline payment field with the popularity of smartphones in recent years. A variety of
combination between POS payment and mobile payment has mushroomed. In the field of POS
terminals, mobile payment technologies include Bluetooth, USB, NFC payment, 2D bar code
payment and so on. For payment, users only need to make mobile terminals (mobile phones,
Tablet PCs, etc.) featured with NFC modules or 2D bar code generation be close to the POS
machine involved with relevant technical identification modules, then the funds will be
automatically deducted from the users' financial accounts.
In addition, sound wave payment, finger print identification and other technologies are expected
to penetrate the POS field.
Comparison of Offline Mobile Payments
Payment
Method
NFC Mobile Payment
Billing by Operator
2D
Bar
Payment
Codes
Technology
NFC Technology
Mobile Network
2d
Bar
Technology
Code
Dominant
Party
UnionPay,
Operators,
Terminal Operators and
others
Nearby
interaction
between mobile phones
and other devices
Operators
UnionPay, Third-party
Payment Platforms
SMS Authorization and
Confirmation
2D
Bar
Scanning,
Confirmation
Advantages
Convenient
near-field
payment, mobile phones
become wallets
Convenience,
Threshold
Low
Fast,
Low-cost,
User-friendly
Interface
Disadvanta
ges
Hardware
should
be
popular, NFC chip costs
exist, profits of terminal
vendors
are
diluted,
payment habits need to
be changes slowly
Access control, Public
Transportation,
Small-Amount
Mobile
Payment
Operators
profits
large
Dependence on the
financial
account
interfaces;
sellers
need
to
have
accounts on the cloud
for collecting money
Shops, Face-to-face
Payment
Transaction
Mode
Main
Applications
earn
Network game cards,
prop purchase, people
with lower educational
level
108
Code
Sound
Wave
Payment
Card
Reader
Payment
Acoustic
Identification
External
card
readers read the
card information
UnionPay
Third-party
Payment
Platforms
Acoustic
Identification,
Account
Confirmation,
Amount Input
Interesting,
Convenient,
Face-to-face
Payment, Offline
Payment
Sound
wave
payment, slightly
high equipment
costs
Vending Machine,
Face-to-face
Payment
Card
Reader,
Cards
and
Passwords
No
need
to
develop
new
habits, easy to
accept
Complex
payment, easy to
lose card readers
Cafes, Shops
Global and China Mobile Payment Industry Report, 2019-2025
Representat
ives
Companies
or
Applications
Google Wallet, Docomo,
UnionPay Quick Pass
China Mobile,
Telecom
China
Alipay
Wallet,
WeChat payment
Alipay Wallet
US Square
Source: Minsheng Securities; ResearchInChina
6.3.1.1 Fixed POS Terminal
Fixed POS machine is the terminal used most widely, also known as desktop or wired POS machine,
divided into fixed (desktop) dot matrix POS machine and fixed (desktop) thermosensitive POS
machine.
Fixed POS machine is installed in fixed places, such as hotels, restaurants, supermarkets,
shopping malls, boutiques, tourist attractions, prepaid service providers, specialty stores, chain
stores and beauty shops.
6.3.1.2 Mobile POS Terminal
Mobile POS terminal is also called handheld POS machine or wireless POS machine. On the basis
of original POS terminals, it communicates with bank and UnionPay’s payment transaction
systems by using GPRS, 2G, 3G, 4G and other wireless communication platforms.
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Global and China Mobile Payment Industry Report, 2019-2025
The wireless data communication function of mobile POS payment system can realize payment
and settlement needs anytime and anywhere, thus it can be promoted and applied in places with
dynamic charging and settlement requirements.
Applicable Industries
1 Catering: Waiters bring mobile POS machine to customers for paying bills.
2 Booking: Customers pay for the booked tickets with mobile POS machine provided by couriers.
3 Insurance: Insurance agents use mobile POS machine to collect premiums, and send policyholders’
personal data, insurance policy number, payment amount, etc. to the insurance company's data acquisition
system instantly.
4 Utilities: Mobile POS can complete on-site meter reading of water, electricity and gas, data transmission and
charging.
5 Others: Business halls of China Mobile and China Unicom, gas stations, express delivery companies,
takeout business, entertainment venues, tobacco distribution and other industries.
Prospects
By the size of merchants, mobile POS is mainly suitable for small and micro merchants. With the
escalating consumption structure of urban and rural residents, cash settlement and other
traditional means of payment have been unable to meet the demand of small and micro merchants
on financial management. But the vast majority of small and micro merchants have not attracted
the attention of banks because of their small trading volume, and they feel difficult to apply for
POS machine. Since People's Bank of China issued third-party payment licenses in 2011,
third-party payment companies have launched acquiring services for small and micro merchants.
With the standardization and escalation of acquiring services offered by third-party payment
companies, small and micro merchants have enhanced their awareness of financial security. In
future, the demand of small and micro merchants for POS terminals will jump quickly. By the end
of 2015, the number of Chinese small and micro merchants had hit about 70 million, so the mobile
POS terminal market capacity might be 70 million if each of them installed a mobile POS terminal.
By application sectors, E-commerce, express delivery, tobacco, taxis and utilities will trigger more
demand for mobile POS terminals swiftly.
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6.3.1.3 Imagpay
Like external card readers, mobile card readers read magnetic stripe information and transmit
data via 3.5mm audio sockets. Mobile card readers cannot attain payment, but can pay or receive
funds under the support of software.
Imagpay Breakdown Products and Characteristics
Product
Appearance
Features
Simple Mobile
Software encryption and decoding. The second main track
Card Reader
of the magnetic stripe is read. 100,000 swipes. Poor
compatibility with smart phones and tablet PCs; low
recognition rate.
Encryption
Its hardware and software are involved with encryption
Mobile
technology, much safer than Simple Mobile Card Reader.
Card
Reader
Built-in battery can support 20,000 swipes. It basically
identifies all smart phones and tablet PCs; its recognition
rate hits 95% or above.
PIN
Mobile
Pad
The derivative of Encryption Mobile Card Reader has
Card
additional button set, suitable for a variety of smart phones
Reader
EMV
and tablet PCs.
+
Magnetic
Be designed for chip bank cards. Accomplish mobile client
functionality by reading the information on chip bank cards.
Stripe Mobile
Card Reader
NFC
+
It completes transactions through induction (RF) of chip
Magnetic
card memory more conveniently and efficiently. Combined
Stripe Mobile
with NFC functions, it supports NFC financial cards with
Card Reader
flash memory.
Source: ResearchInChina
In China, mainstream mobile card readers embrace Yeahka, iboxpay, Lakala, 99bill, Coolpos,
Suixinfu, Shouzhangbao, GunionPay, Shengpay, Youshua, QPOS, Mobile Payment, Sunyard, and
Three-dimensional Depth.
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Global and China Mobile Payment Industry Report, 2019-2025
Product Characteristics of Major Imagpay Manufacturers in China
Manufacturer
Product
Features
Yeahka
Support Tencent’s payment services.
iboxpay, Lakala,
Mainly
Coolpos,
including: credit card payment, bank
Shengpay,
transfer, prepaid recharge and others.
support
convenient
services,
Youshua, Mobile
Payment
and
GunionPay
99bill
Mainly
suitable
for
and
remote
payment
on-site
mobile
payment.
For
on-site mobile payment, users can pay
after cashiers link mobile phones with
99bill. For remote payment, users can
pay directly after connecting their mobile
phones with 99bill.
Source: ResearchInChina
6.3.1.4 NFC POS Terminal
NFC-enabled POS terminals have embedded NFC modules. NFC-enabled mobile terminals
(including mobile phones, Tablet PCs, etc.) can complete the payment as long as closing with
NFC-enabled POS terminals. NFC mobile phones have three main modes: NFC-SD cards, NFC-SIM
mode and NFC phone mode.
NFC phones are the NFC-enabled mobile phones preinstalled with smart security chips by vendors,
they can directly apply for and download bank cards without replacing SIM cards or other
hardware to attain near-field non-contact payment, remote payment, electronic cash top-up and
fast small-amount site transactions. Relying on TSM (Trusted Services Management) system, NFC
phones can help commercial banks shift from the traditional "counter issuing" to "electronic
issuing" and support near-field and remote payment, which is the future trend.
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Global and China Mobile Payment Industry Report, 2019-2025
NFC payment is involved with mobile phone vendors, telecom operators, commercial banks,
acquirers, UnionPay and so on.
Mobile Phone Vendors: NFC-enabled Smartphones
NFC has been widely used in mobile phones since 2011. Major mobile phone vendors have
launched NFC-enabled smartphones.
Telecom Operators: NFC-SIM Cards
Telecom operators have purchased more NFC-SIM cards. In March 2016, China Mobile started
centralized purchasing of NFC USIM cards, with an estimated quantity of 28.79 million pieces
including four forms i.e. 2FF, 3FF/2FF, 4FF/2FFdouble-cut, and 4FF/3FF/2FF tri-cut. In 2015, China
issued 20 million NFC-SIM cards, with NFC users numbering 6 million. The target for China Mobile
in 2016 includes 10 million NFC users, coverage of 100 city buses and 100 campus enterprises,
and establishment of NFC payment ecosystem.
Financial Institutions: MTPS and TSM
Promoted by People's Bank of China as well as participated by commercial banks, China UnionPay
and mobile telecom operators vigorously, Mobile Trustable Public Service (MTPS) was completed
and recognized by review at the end of 2013. A number of agencies have joined MTPS with their
Trustable Service Management (TSM) platform systems.
NFC-enabled POS Terminals
22.82 million POS terminals had joined UnionPay cumulatively by the end of 2015, of which 6.8
million ones or 30% could support UnionPay "Quick Pass" (NFC). The existing POS terminals can
obtain NFC functions through transformation, at the unit renovation cost of RMB300-500. Newly
produced POS terminals can conduct NFC payment after the implant of NFC modules derived from
electronic component vendors with the unit cost of about RMB70-80. In March 2014, Guidance of
People's Bank of China on Development of Mobile Payment encouraged commercial banks to
expand NFC mobile payment applications. In future, NFC-enabled POS terminals will account for
an increasingly high proportion of the total POS terminal shipment; by 2020, about 70% of
Chinese POS terminals will support NFC.
6.3.1.5 QR Code POS Terminal
2D bar code payment is a new-generation mobile payment scheme based on the account system.
2D bar code payment is dominated by third-party payment companies. Currently 2D bar code
payment includes active and passive code scanning.
"Active code scanning": Merchants can create 2D bar codes after inputting accounts, commodity
prices, special offers and other transaction information into 2D bar code terminals; then,
customers complete payment by scanning 2D bar codes with mobile payment APP.
"Passive code scanning": Merchants scan individual 2D bar codes on customers’ mobile APP with
scanners and other tools.
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Global and China Mobile Payment Industry Report, 2019-2025
2D bar code payment software comprises payment APP bound with personal bank cards and 2D
bar code generation functions, and corporate payment system. The generated 2D bar codes link to
personal bank card information. Hardware consists of 2D bar code scanners or POS terminals
installed with 2D bar code scanners which decode 2D bar codes. Internationally, only a small
number of enterprises, including Symbol Technologies, Honeywell, Intermec, Datalogic, Denso
and Newland, master core 2D bar code technologies.
Currently, financial institutions and third-party payment companies (mainly Alipay, WeChat,
UnionPay Merchant) are boosting their own 2D bar code payment system.
As 2D bar code payment standards and relevant certification system are promulgated, the 2D bar
code payment industry has been gradually standardized, and customers have been cultivating the
habit of 2D bar code payment. In future, the demand for POS terminals installed with 2D bar code
scanners will rapidly increase.
6.3.1.6 CMPOS (Commercial Management Point of Sale)
CMPOS (Commercial Management Point of Sale) is a smart POS combining online and offline as
well as integrating data management with marketing. It is also a business management and
payment solution based on smart payment terminals, the Internet and big data analysis
techniques. CMPOS system consists of three parts: cash register POS system, data ERP system,
product information reading & code scanning system.
Taking mobile payment as the basic function, CMPOS terminals make use of supporting business
management cloud platform to manage receivables, membership, stores and the like; besides,
they can realize business information management and statistical analysis to implement precision
marketing for customers so as to improve customer viscosity. CMPOS is generally compatible with
NFC, 1D / 2D bar codes, light and sound wave payment. The emergence and development of
CMPOS has greatly stimulated the O2O process and equipment upgrading of all industries.
Via open software platform, CMPOS can support a variety of interfaces for connection, such as
dianping.com, group purchase platforms or corporate dedicated consumer platforms. Merchants
can login on online stores, WeChat, QQ, group purchase websites and the like through CMPOS to
post any business information. Consumers can submit orders by themselves through CMPOS for
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Global and China Mobile Payment Industry Report, 2019-2025
consumption. CMPOS allows users to customize sales strategies, discounts and special offer time,
manage orders and bills in batches. By virtue of CMPOS, merchants can check their operation,
timely detect and adjust their business strategies freely.
A traditional cash register system typically consists of a barcode scanner, a cash register and a POS
machine, with a total cost of about RMB6,000. CMPOS only requires the hardware cost of around
RMB2,000, and can achieve real-time remote update through servers.
6.3.2 Market Size
Number of Merchants Joining the UnionPay Network in China and YoY Growth,
2007-2025E
Number of Merchants Joining
YoY Growth
the UnionPay Network(1,000)
2007
739
2008
1,182
59.9%
2009
1,567
32.6%
2010
2,183
39.4%
2011
3,180
45.7%
2012
4,833
52.0%
2013
7,635
58.0%
2014
12,034
57.6%
2015
16,700
38.8%
2016
20,672
23.8%
2017
25,926
25.4%
2018
27,330
5.4%
2019E
30,881
13.0%
2025E
45,503
Source: People's Bank of China, ResearchInChina
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Global and China Mobile Payment Industry Report, 2019-2025
Number of New Merchants Joining the UnionPay Network in China and YoY Growth,
2007-2025E
Number
of
Added
Merchants
Joining
YoY Growth
the
Unionpay Network (1,000)
2007
218
2008
443
102.8%
2009
385
-13.0%
2010
617
60.2%
2011
997
61.7%
2012
1,653
65.7%
2013
2,802
69.6%
2014
4,399
57.0%
2015
4,666
6.1%
2016
3,972
-14.9%
2017
5,254
32.3%
2018
1,404
-73.3%
2019E
3,551
152.9%
2020-2025E
14,622
Source: People's Bank of China, ResearchInChina
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Global and China Mobile Payment Industry Report, 2019-2025
Number of POS Terminals Joined the UnionPay Network in China and YoY Growth,
2007-2025E
Number
of
POS
YoY Growth
Joined the UnionPay
Network (mln)
2007
1.18
2008
1.85
56.8%
2009
2.41
30.3%
2010
3.33
38.2%
2011
4.83
45.0%
2012
7.12
47.4%
2013
10.63
49.3%
2014
15.94
50.0%
2015
22.82
43.2%
2016
24.535
7.5%
2017
31.189
27.1%
2018
34.148
9.5%
2019E
36.72
7.5%
2025E
50.76
Source: People's Bank of China, ResearchInChina
117
Global and China Mobile Payment Industry Report, 2019-2025
Number of New POS Terminals Joined the UnionPay Network in China and YoY Growth,
2007-2025E
Number of Added POS
Joined
the
YoY Growth
UnionPay
Network (mln)
2007
0.36
2008
0.66
83.30%
2009
0.56
-15.20%
2010
0.93
66.10%
2011
1.49
60.20%
2012
2.29
53.70%
2013
3.51
53.30%
2014
5.30
51.00%
2015
6.89
30.00%
2016
1.72
-75.10%
2017
6.65
286.84%
2018
2.96
-55.52%
2019E
2.57
-13.10%
2020-2025E
14.04
Source: People's Bank of China, ResearchInChina
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Global and China Mobile Payment Industry Report, 2019-2025
Number of Bankcards for Every POS Terminal in China, 2007-2025E
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019E
2025E
1,270
976
858
725
611
497
396
310
240
250
215
222
213
205
Source: People's Bank of China, ResearchInChina
POS Terminal Ownership per Thousand People in China, 2007-2025E
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019E
2025E
0.89
1.39
1.8
2.49
3.58
5.26
7.81
11.65
16.66
14.95
22.56
24.57
25.81
30.66
Source: People's Bank of China, National Bureau of Statistics, ResearchInChina
Based on the above data combined with the low penetration rate (about 27%) of POS terminals in
micro, small and medium-sized merchants, the Chinese POS terminal industry still has great
development space. With the advancement of urbanization, formation of resident’s card-swiping
habit, as well as new and replacement demand for POS terminals stimulated by NFC payment, QR
code payment and EMV migration, POS terminal industry will continue to maintain rapid
development in China.
119
Global and China Mobile Payment Industry Report, 2019-2025
In 2018, Newland Digital Technology Co., Ltd become the enterprise with the most POS terminal
shipments in the world or 13,657,985 units with a 13.2% share of the global total, followed by
Shenzhen Xinguodu Technology Co., Ltd. (NEXGO) 6,981,958 ones, sharing 6.7%.
China's POS Terminal Shipments, 2015-2025E
Source: ResearchInChina
6.3.3 Trend of Products
In the future, China’s financial POS terminal industry will present the following trend:
1. Miniaturization (for certain customers)
With small, portable products and technical services for personal applications as the orientation of
development, e.g. POS, suitable for carrying and using by personnel engaged in logistics,
insurance, etc.; electronic payment application software development services with mobile phone
as the main carrier.
2. Maximization (for large industry merchants)
The large industry merchants-oriented POS develops towards multimedia, self-service payment
terminal
equipment
multi-application,
and
large
self-service,
payment
large
business
integrated
system
equipment
software
suitable
services,
for
such
as
communication,
transportation, public utility departments, tobacco and other large industrial applications and with
the function of payment. With the extensive use in smart phones and other electronic equipment,
based on its intrinsic freedom and openness, powerful software compatibility and other features,
Android OS has increasingly become the important direction of electronic payment acceptance
software and hardware development.
3. Diversification
A variety of payments will co-exist in the future. POS only identifying a magnetic strip card, chip
card and other physical cards will be phased out, while the demand for POS terminals supportive
of various information literacies will keep growing. POS terminals will probably read cards and
120
Global and China Mobile Payment Industry Report, 2019-2025
personal information in electronic format, such as two-dimension code (QR code), NFC, sound
wave, fingerprint, Facebook payment, arsenal of electronic lottery and other new modes of
payment.
4. Intellectualization (CMPOS)
More and more POS terminal will integrate a variety of software and hardware. In terms of
software, there are cashier system, ERP system, CRM system, member management system, etc.,
so as to realize financial statistics, business management, marketing services, and other functions;
hardware includes NFC module, QR code read module, fingerprint recognition module, acoustic
recognition module, face recognition module, etc. thus achieving the co-existence of multiple
payment methods.
On October 12, 2015, ChinaUMS released “open mobile pan-non-acceptance” network and
product plan. Products include mobile digital wallet plug-in terminal“POS Pay”, with POS
acceptance network as basis and non-terminal as acceptance machines and tools, aimed at
payment under O2Oscenario, providing customers with functions covering disbursement account
and discount coupon.
Functional Evolution of Intelligent POS Terminal
Source: ResearchInChina
121
Global and China Mobile Payment Industry Report, 2019-2025
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