By Wang Xinchuan

With the mobile phone gradually covering functions of bank card, prepaid card, bus card and social security card, the times of using mobile phone to pay for transportation, shopping and food has started quietly. According to the data, by the end of 2011, the number of mobile payment users in Chinese banks had reached 145 million with a volume of 247 million transactions and an amount of nearly RMB 1 trillion Yuan last year, growing 109 percent and 74 percent respectively compared to that in the previous year.

On China Summit Forum for Innovation and Development of Payment and Settlement held on April 10, people paid special attention to the great prospect of mobile payment and the way to break through the development bottleneck.

Convenient and beneficial for people so as to satisfy the diversified payment demand

Mobile payment, with characteristics of paying at any time and any place with portable measure, is one of the core contents of mobile financial service and also an innovative financial measure that conveniences and benefits people. It is capable of satisfying the diversified payment demands in the society, plays an important role in solving problems like deficiency of financial service in rural area.

Liu Shiyu, vice president of People's Bank of China, said in the Forum that as an important innovation of retail payment system and beneficial supplement to traditional financial service, mobile payment enjoys a great market prospect. In general, the development of mobile payment business in China, still in its infancy, will be inevitably restricted by various conditions. A lot of problems such as prevention of payment risk, development of user custom, construction of acceptance environment, labor division and cooperation in the industry and choice of the commercial mode need to be further explored and solved.

Liu said that mobile payment could deepen the financial service and advance the rapid development of electronic business and the whole consumer product industry so as to satisfy the diversified payment demands in the society. Meanwhile, mobile payment could help solving the problem of limited and uneven resources for financial service so as to facilitate the development of GSP (generalized system of preferences) financial system.

Lack of coordination, indicating the inefficient integration of the industrial chain

Li Yue, director of Settlement Division of People's Bank of China, says that mobile phone payment is related with a lot of industries. In the aspect of service providers, it is involved with a lot of technical, terminal, network and product providers such as mobile phone manufacturers, mobile network operators, financial organizations, payment organizations, chip manufacturers, security module issuers, application service providers and credible service management platform operators; in the aspect of service demanders, it is related with merchants and final consumers.

Currently, it seems particularly urgent about how to guide all parties in the industry to be adapted to the technical development and market demand so as to advance healthy and orderly development of the mobile payment industry.

Currently, interconnection among mobile payment devices remains to be realized. It is common for various organizations to conduct a closed research and development. The incompatible standard leads to the related devices like chip and mobile phone terminal cannot be produced in a large quantity and the financial and payment organizations rely more on the customized products or developing different applications in order to promote the mobile payment business, which results in very high promotion cost and poor consumer experience.

At the same time, a mature commercial mode remains to be set up in the mobile payment market in China. There is a poor coordination among most mobile network operators, financial organizations and payment organizations and the win-win mechanism for strategic cooperation remains to be formed, so that the mobile payment industrial chain is not efficiently integrated.

Referring to the acceptance environment, the near-field payment by mobile phone is oriented to small-amount, rapid and convenient payment. It needs interconnection between networks and the existing acceptance terminals been upgraded to be available for mobile and non-contact payment system. Presently, the near-field payment environment is not so ideal even in big cities like Beijing and Shanghai.

Moreover, bank card penetration rate is less than 10 percent in rural area. There is a high penetration rate of mobile devices but low in bank service in the vast rural area, which offers a basic device condition for the development of mobile payment. However, presently, most mobile payment service providers still focus on the existing bank customers or high-end customers and fail to satisfy the demand of customers in the rural area.

Making best use of the existing conditions to establish a reliable service management platform

Li Yue said that mobile payment is characterized with large industrial span and long industrial chain, and it needs to make best use of the existing conditions and guide all industrial participants to be better adapted to technical development and market demand, so as to promote rapid and healthy development of the mobile payment industry.

Li believes that the mobile payment industry is gaining momentum in China. Firstly, it should make effort to set up the credible service management platform, so as to advance the works like standardized entry of account information, application management, resource integration, profit coordination and standard formulation.

Secondly, it should improve the legal construction related with mobile payment. It is said that People's Bank of China is losing no time to formulate the laws and regulations related with mobile payment so as to provide a sound policy environment for the development of mobile payment business.

Thirdly, it should strengthen the construction of mobile payment acceptance environment. Mobile payment cannot be developed steadily without cooperation among all industrial participants. Therefore, it should redeploy the powers of all industrial participants, encourage the existing card acceptance organizations to upgrade the existing terminals with the help of the promotion of financial IC card, permit competent payment organizations to enter the acceptance filed of mobile payment, and support them to install new acceptance terminals to satisfy the acceptance demand for mobile payment. For the acceptance environmental construction for mobile payment, there should be a path of sound progress with mutual stimulus and mutual promotion through guidance by the government and participation from all organizations.

Moreover, it should encourage the development of mobile payment in rural area. Mobile payment service providers should change their operation concept, focus on the strategy for long-term development, and promote the mobile payment service in rural area including large number of towns where finance is nothing. At the same time, it should increase investment and innovation, enhance advertizing and promotion, and gradually foster the consumption habit and market. It should strengthen policy support so as to create a sound policy environment for the development of mobile payment business in rural area and encourage financial and payment organizations to actively participate the development of mobile payment business in rural area.