The Beijing branch of China Telecom Corp. Ltd. has begun enabling customers to make payments using their China UnionPay cards over its mobile network as part of a pilot that launched Oct. 20.
According to the company, interested customers must upgrade their phones at any of 70 Beijing Telecom outlets around Beijing. During the upgrade, they will keep their same phone number, but the telco will replace the phone’s SIM card with a UIM, or user identify module, card. The upgrade is free.
After upgrading their phones, customers may check balances and transfer funds between accounts, buy lottery tickets and game cards, and top off their cell-phone balances, the company says. They may link up to 10 China UnionPay credit or debit cards to each device.
Shanghai-based China UnionPay Co. Ltd. is China’s sole card network, with more than 400 member institutions and 2.7 billion cards issued in China and abroad to over 700 million cardholders as of last month, according to a report by Xinhua, China’s official news agency.
Beijing Telecom picked China UnionPay because of its compatibility with many contactless-payment platforms, such as transportation; its wide acceptance; and low operating costs, Weidong Wang, an analyst from Beijing-based iResearch Consulting Group, tells PaymentsSource.
Security is assured through encryption, both on the phone itself and during wireless communications, by supporting authentication encryption algorithms and OTA (over-the-air) technology, he says.
However, it might take time for the rest of China’s telcos to support mobile payments, Wang adds.
“There are still difficult issues across the country when it comes to the harmonization of standards,” he says. “Beijing Telecom’s payment service is just a pilot project.”