Rumor: China Mobile to Use 2 Mobile Payment Standards
CCID, 4/06/10
A China Mobile (NYSE: CHL; 0941.HK) official has confirmed to reporters that, in addition to its original plan to use the 2.4GHz mobile payment standard, the mobile operator is also considering adopting the 13.56MHz Near Field Communication (NFC) standard, which is more favored by the banking industry. The source said such a decision would allow China Mobile to maximize its use of existing industry chains.
An industry source who wished to remain anonymous said that while China Mobile's proposed 2.4GHz standard is more advanced than the traditional NFC standard, it has encountered difficulties due to the lack of a mature industry chain. The 2.4GHz standard is based on RFID, whereas the majority of the POS terminals supplied by banks and other financial organizations use the 13.56MHz NFC standard, which is not compatible with RFID-SIM cards. Replacing these POS terminals would constitute an extremely large expense, while China Mobile's adoption of NFC-based technology would allow compatibility with existing systems.
Additionally, China Mobile has proposed two operational modes for its 2.4GHz: a short-range mode that would require the phone to be swiped across the reader, and a medium to long-range mode that could transmit in excess of 20 meters. The latter will be a major source of advertising income for China Mobile, as vendors with a broadcasting terminal will be able to send real-time advertisements to pedestrians passing within 20-30 meters of their shops. China Mobile has therefore not scrapped its plans for the 2.4GHz standard, but is instead setting its strategic sights on a combination of the two.
Editor's Note: For more background on China Mobile's decision to use 2.4GHz, please see "China Mobile Chooses 2.4GHz Mobile Payment Standard," MD 7/30/09 issue.
Keywords: LBS China Mobile Near Field Communication wireless mobile payment POS CHL RFID 0941.HK contactless payment
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