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August 08, 2011

China's NFC Payment Transaction Values Could Surpass $8 Billion by 2014: ABI Research

“China’s mobile payments industry is burgeoning, attracting many participants wishing to grab first-mover advantage and vie for a bigger slice of the pie,” according to ABI Research (News - Alert).

The research agency estimates that Near Field Communication (NFC) payment transaction values in China could surpass $8 billion by 2014.

Industry leaders like Google and Nokia  are supporting the technology through the latest generation of Android (News - Alert) handsets and NFC-capable mobile devices.

Local device manufacturers and operators have shown interest in supporting contactless mobile payment, said the research titled, “Mobile Payments in China.” For example, ZTE has announced plans to support the technology in China.

Recently ZTE (News - Alert) expanded its partnership with INSIDE Secure, a provider of semiconductor solutions for secure transactions, to integrate INSIDE’s NFC technology into ZTE’s GSM and next-generation TD-SCDMA smartphone platform, which is based on the Android OS.

“China is a big mobile payments market to play for,” said Jake Saunders, VP for forecasting at ABI Research, in a statement. “There were more than 868 million cellular subscribers as of the end of March 2011.”

Key players in Chinese mobile payment market include financial institutions (China UnionPay), third party mobile payment service providers, and Mobile Network Operators (China Mobile (News - Alert), China Unicom and China Telecom).

After analyzing the trends, ABI Research believes that the mobile payment market in China will largely adopt an MNO-led business model.”

The Chinese government prefers an NFC device solution utilizing the 13.56 MHz frequency band. The country is also adopting bridging solutions that will stimulate the contactless payment market. The most popular of them is contactless (NFC) SIM cards. WatchData’s SIMpass solution also has attracted strong interest from all three operators.

These developments have resulted in the shipments of more NFC handset add–ons than NFC-enabled mobile handsets. According to ABI Research, 2.5 million SIMpass add-ons and 50,000 SD add-ons are shipped, versus 45,000 handsets in 2010.

Rajani Baburajan is a contributing editor for TMCnet. To read more of Rajani's articles, please visit her columnist page.

Edited by Rich Steeves


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