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Mobile Payment:
New Tendency of Future Payment
Electronic Banking Department
Shanghai Pudong Development Bank
June 10, 2014
Contents
The Era of Mobile Payment
Characteristics and prospect
of Mobile Payment
SPD Bank & Mobile Payment
I、The Era of Mobile Payment
• Wide spread of mobile smart devices: According IDC, U.S.A, the
global shipments of smartphones in 2013 reached 1 billion, which is
3.16 times of PC
• Lower costs of mobile smart devices: low entry barrier for ordinary
customers
Rapid Spread of Smart Devices
1、The Fundamental environment of Mobile Payment tends to
maturity
• All cities at or above the country level in China are covered with 3G
mobile signal.
• December 4, 2013, the Ministry of Industry and Information
Technology officially issued 4G license. China will gradually step into
the 4G Era, whose transmission speed is 10 times faster than 3G.
Good Foundation of Mobile Internet
• In 2013, the trading volume of
the third-party Internet
payment services in China was
5.37 trillion Yuan; the trading
volume of mobile payment is
1.25 trillion Yuan, increasing
by 707.0%.
• In 2012, the trading volume of
Internet Payment is 3.66
trillion Yuan; the trading
volume of mobile payment is
1511.4 billion Yuan,
increasing by 89.2%
• (Sources:iResearch)
2、Rapid Development of Mobile Payment
0.080.15
1.25
0
0.2
0.4
0.6
0.8
1
1.2
1.4
2011 2012 2013
The Trading Volume of Mobile Payment in China in the latest
3 years (trillion)
3、More Attention to the “thumb "Market
• Financial and non-financial institutions are paying more
attention to mobile payment:
• Financial institutions: widely popularize mobile banking
• Non-financial institutions: launch mobile phone Apps,
attract customers by free or discounted services.
Fierce Competition
• “DiDi Taxi ”and “KuaiDi Taxi”
• Free commission charge for mobile banking services
4、The “Mobile” Thinking and Behavior of the Public
• Social networking:Weibo, WeChat
• Food:Dianping.com, Group Purchase
• Transportation:Taxi Booking, Mobile Phone Navigation,
NFC Mobile Payment
• Payment:Mobile Banking, WeChat/Alipay, NFC Mobile
Payment
• Etc.
“Mobility”has been infiltrated into people’s daily life
II、Characteristics and prospect
of Mobile Payment
Real Time
GreenEcosystem
1、 “Finance in Real Time”
• Mobile Payment treats the cellphone as the carrier, and has
the service capacity of 7/24 hours, which helps customers get
rid of the dependence on physical banking branches and
makes it possible to obtain the full bank card services such as
application, download, deposit, replacement, inquiry on air.
Anytime
Anywhere
Anyway
2、 “Green”
• Mobile Payment integrates bank cards into NFC-SIM
cards, and thus replacing traditional physical band cards.
It effectively reduces card costs and the waste of social
resources.
3、“New Ecosystem of Finance”
• Mobile payment involves various parties such as cellphone
manufacturers, chip suppliers, telecommunication carriers, the
China UnionPay, commercial banks and consumers, which
becomes a closely-linked ecosystem. Each party should take
advantage of its own strength and closely cooperate with each
other so that mutual benefits can be ultimately achieved.
Bank/China
UnionPay
Chip
supplierCellphone
manufacturer
Telecommunication
carrier
Consumer
4、Mobile Payment has prosperous Future
• The PRC State Council — launched《Several
Suggestions about Promoting Information Consumption to
Expand Domestic Demand》, encourages and supports
the development of mobile payment.
• National Development and Reform Commission &
People’s Bank of China — launched《The Notification
about the Organization of the Pilot Work of Mobile
Electronic Commerce, Financial, and Science
Technological Services Innovation》, pushes forward the
experimental work of mobile payment development in
some specific cities.
Policy Support
• People’s Bank of China, the Ministry of Industry and Information
Technology, telecom carriers, the China UnionPay, and
commercial banks have reached the agreement of 13.56 MHZ
and PBOC Standard.
Unified Standard
•Cellphone manufacturers, telecom carriers, the China UnionPay
and commercial banks have a clearer division of responsibilities on
terminal access, environmental establishment and customer
development.
•By far, there are over 3 million contactless POS in China that can
accept mobile payment, covering transportation, department store,
dining and pharmaceuticals industries.
More Mature Environment and Market
5、Mobile Payment has prosperous Future
Ⅲ、SPDB Bank’s practice on mobile payment
Technique
Concept
Market
Innovating
For Better
Life
NFCPayment
Mobile Bank
WeChatBank
Leading in
NFC near-field
payment
Special
advantage of
WeChat bank
Rapid
expand of
mobile bank
1、SPDB Bank Mobile Payment system
2010
• Strategic cooperation with CMCC, take NFC Payment as important cooperate product
2011
• Developed the first non-contact payment card, gained over 1 million customers
2013
• Developed the first NFC-SWP mobile payment product
2014• Application on Shanghai subway
2、Course of SPDB NFC development
Technique
ApplicationFunction
Product
3、 Characteristics of SPDB BANK Payment
(1)Technique Leading
Dec,2012. SPDB Bank and CMCC first finished NFC-SWP
mobile payment development.
Feb,2013. SPDB Bank and China UnionPay first finished
system access.
SPDB Bank has been the first bank that cooperate with
China UnionPay and telecom operators.
Product forms:Shaped card\ Payment based on all-
terminal cellphone\ Payment based on all-terminal
NFC-SIM
Comprehensive card:Debit card\credit card
(2)Product Leading
IC card whole life air
management: Air
application\Download\
Deposit\Inquiry\Change
card
CMCC & SPDB system
connection,SPDB NFC
payment can
immediately credit
approval by people’s
CMCC information
(3)Function leading
Air apply
Air
download
Air
inquiry
Air
deposit
Change
card
Feb,2014. SPDB Bank finished the updating of
Shanghai subway system with CMCC. People
can take subway by SPDB Bank’ NFC
payment. It’s the first case that NFC applies
on transportation industry.
(4)Application leading
Difficulties of NFC
Lack of NFC cellphone
variety, most cellphone
don’t support NFC
NFC should be
used in other
areas, besides
finance and
payment
People haven’t fell
into the habit of NFC
when payment
Cellphonevariety
Less application
of NFCCustomer’s
habit
(5)Some issues need attention of NFC Payment
• Professional financial service such as Investment, Wealth management, Remittance, Payment
• Remittance by two-dimension code、cellphone number
Personal service
Company service
Humanization
service
• Company account inpuiry, remittance or loan
Mobile
Banking
4、Mobile Banking— Rapid expandsion
5、WeChat Bank—leading Virtual Bank
微理财
• Cooperation with Tencent, provide financial
service by WeChat
• Customer service by
character\voice\image
• Based on wealth management, including
series service of withdraw
\payment\loan\travel, etc.