The three million people who ride Beijing's subway every day entered a new era on June 9, as the sale of paper tickets stopped and all riders began using contactless cards:
With the introduction of the new Automatic Fare Collection (AFC) system, passengers can now buy the new tickets from vending machines at the entrance to each platform.
People with Yikatong prepaid cards that can be used on buses and the subway network, can continue to use them.
Before yesterday, most passengers bought paper tickets which were checked manually.
Actually, the majority of subway riders had already purchased a contactless Yikatong card before June 9, but many less frequent riders and tourists were still buying paper tickets. Many of them were confused at the new system, and some had tried using their identification cards or even business cards, according to one subway worker I talked to. The city put out an extra six thousand employees to help explain the new system to passengers.
Even some regular commuters who had been using their Yikatong cards for years in Beijing's subway and bus system were baffled by the top-up machines and the need to swipe one's card when leaving the station. As the week progressed, though, the chaos declined significantly, and the top-up machines have eliminated most of the previously long ticket lines.
As we have mentioned before, the Yikatong card also can be used for micropayments at a few stores in Beijing. But progress here has been slower; currently the authority behind the "Beijing SuperPass" lists just 762 locations in Beijing that accept Yikatong payments, most of them concentrated in a few supermarket, convenient store, hair salon, and movie theatre chains.
On May 27, the Bank of East Asia (BEA) has become the first foreign bank to issue debit cards in China. BEA's three types of China Unionpay-compliant debit cards are the Bauhinia Card, SupremeGold Card and SupremeGold Platinum Card. The minimum deposit amount to open an account is 5,000 RMB for the Bauhinia Card, 500,000 RMB for SupremeGold, and 2 million RMB for SupremeGold Platinum. Previously, the lowest initial deposit amount for foreign banks was 100,000 RMB. Despite the lower threshold, BEA's debit card accounts will still target wealthier users. (In comparison, one can open an account at a domestic bank for as little as 10 RMB.)
BEA is promoting its cards aggressively, but the company is limited to no more than one million of the debit card accounts in 2008. Given such a small limit, I believe that BEA simply hopes to use the cards to expand its presence in China. As restrictions on foreign banks (presumably) continue to be relaxed in the coming years, BEA would be well positioned to offer a wider range of services to a much greater number of customers.
Maverick China's Junelyn Han has been invited to speak at the Mobile Payments World 2008 conference in Singapore. The conference will take place from July 9-11. Junelyn will present on the latest trends in China mobile payments.
Coming on the heels of the long-awaited annoucements of operator restructuring and 3G licensing in China, these next few months will be an especially interesting time for mobile payment companies, along with mobile advertising and other mobile-based services and content companies in China. 3G promises to provide a mobile network with greater mobile data speeds, enabling richer mobile-based services to be pushed to mobile users in China. For mobile payment companies, this means the ability to rely on technologies other than SMS as their payment channel. Whether this may be enough to jumpstart the industry in China, though, is another issue.
Recently the president of China UnionPay (CUP), Xu Luode, announced that foreign banks will be able to issue bank cards within the CUP network but cannot become CUP shareholders. CUP is China's sole national bank card network, and its shareholders are China's domestic banks, with several of the largest holding the most shares. The statement was made after it was announced that The Bank of East Asia became the first foreign bank to issue bank cards (debit and credit cards) in China. Foreign banks have been allowed to offer limited banking services but had not yet been allowed to issue bank cards in China before.
CUP is supervised essentially as a part of the government. Xu's statement shows that despite the continued, gradual opening of China's banking sector to foreign companies, the government will continue to call the shots.
The recent earthquakes in Western China has rattled the lives of many. To offer support to the victims and their families, Chinese online payment company IPS is now accepting cash donations via its website and all proceeds will go to the Red Cross Society of China.
Donations are accepted via IPS' payment system through the following partner banks: China Merchants Bank, China Construction Bank, Agricultural Bank of China, China Everbright Bank, Bank of China, Industrial & Commercial Bank of China, China Minsheng Banking Corp, Industrial Bank, Guangdong Development Bank, Shanghai Pudong Development Bank, Shenzhen Development Bank, and Huaxia Bank.
