Mobile e-payment weakest link

08:46, June 03, 2011      

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An advertisement for UCWeb on the side of a bus in Nanjing. According to a report issued by the China Internet Network Information Center in January, the number of Chinese mobile Internet users climbed to 303 million in 2010. (An Xin / for China Daily)

China's mobile Internet business is promising, but its underdeveloped payment system makes it hard for online retailers to make money, according to Zhang Xiaowei, who runs an e-commerce mobile Internet website in China.

Zhang's website is called and it is like a mobile phone version of, which sells various kinds of products, including clothes, shoes and electronic gadgets, to Chinese cell phone users.

Founded in 2006, it now has daily transactions worth a total of almost 1 million yuan ($154,248). However, 95 percent of them have to be cash on delivery, Zhang said.

"Though our business is booming, we cannot conveniently collect money through people's mobile phones," Zhang said.

Chinese people are reluctant to pay on mobile Internet because of security concerns and the complicated procedures needed to complete a deal, he said.

More than 1.9 million e-commerce operators in China have faced the same problem as Zhang, said Yu Yongfu, chief executive officer of UCWeb, the world's biggest mobile device browser provider by subscribers.

"Money is the lifeblood of mobile Internet retailers - they need it to grow bigger. However, the mobile payment system in China fails in its function of performing blood transfusions," Yu said.

According to a report issued by the China Internet Network Information Center in January, there were 457 million Internet users in the country at the end of 2010, rising by 73.3 million from 2009.

The number of Chinese mobile Internet users climbed to 303 million in 2010. The number of mobile payment users is expected to reach 221 million this year, up 60.9 percent from 2010.

The market volume for 2011 is estimated be 5.24 billion yuan, according to the Beijing-based research firm Analysys International.

The rosy prospects have attracted Internet giants, telecom operators and financial organizations to the industry. Co Ltd, an affiliate of Alibaba Group that runs China's biggest online payment platform, aims to expand its business to mobile Internet once it establishes a dominant position for online payment on the Internet.

Alipay cooperated with UCWeb to allow users to complete payments with UCWeb's mobile Internet browser, since browsers are typically viewed as the entry point for people surfing mobile Internet.

"The service is safe and convenient. What's more, online buyers have no need to enter a password when the transaction involves less than 200 yuan," said Stephen Zhu, general manager of's mobile payment department.

By March 2011, UCWeb had more than 200 million users worldwide, and was achieving 70 billion page views a month, the most among mobile device browsers.

Alipay has more than 550 million registered users and a daily transaction volume of 11 million worth a total of 2.6 billion yuan, according to Peng Lei, chief executive officer of

Alipay holds more than 50 percent of the market for third-party payment, according to a report from Analysys International.

However, China's three telecom operators have adopted aggressive plans to compete in the mobile payment industry.

China Mobile Ltd, the world's biggest telecom carrier by subscribers, bought a 20 percent stake of Shanghai Pudong Development Bank last year to strengthen its mobile payment services for its 600.8 million customers.

China Unicom Ltd established a mobile payment company on April 18 with registered capital of 250 million yuan, the carrier said on its micro blog.

The new company will "actively apply for a mobile payment license and provide professional payment services", China Unicom said.

The smallest operator, China Telecom Corp Ltd, launched a mobile payment branch at the start of this year, Chinese media reported.

Financial institutions, such as China Merchants Bank Co Ltd, China Everbright Bank Co Ltd and Bank of Communications Co Ltd, have also joined the competition.

"I am glad to see everyone is interested in mobile payment. But for me, I hope to get access to tangible services soon, instead of listening to hollow words," said Zhang Xiaowei at

Source: China Daily
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