Southern Metropolitan News, 6/01/11
A source close to the Shanghai Pudong Development Bank (SPD Bank) said yesterday that the first partnership between SPD Bank and China Mobile (NYSE: CHL; 0941.HK) would be announced soon, predicting that the contactless payment platform developed by SPD and China Mobile would launch in Q3 of this year. The platform uses the standard for contactless payments developed by Chinese banking network China UnionPay, the source said, and will require only the simple installation of a payment platform on existing handsets to enable payment functionality comparable to that offered by UnionPay-enabled cards. The long-term goal, the source said, is to tie together user identity data, mobile phone numbers, and bank account numbers to enable secure, convenient payment anywhere with mobile coverage. Earlier media reports had said that China Mobile, which had previously held out to promote its self-developed contactless payment standard, recently abandoned its plans for the 2.4 GHz standard in favor of China UnionPay's 13.56 MHz standard; SPD Bank has confirmed the reports.
The source said that the cost of upgrades to common mobile handsets would not be too great. There are approximately 3 mln networked PoS terminals throughout China at present; each terminal will need to be upgraded with an NFC reader supporting the 13.56 MHz standard, which at the current market price of RMB 280 per unit would mean total investment of more than RMB 840 mln. The source at SPD Bank confirmed that the majority of preparations for the launch would revolve around updates to PoS terminals.