According to the People's Bank of China, all domestic credit cards and debit cards must be part of China UnionPay’s network. Since the company was founded in 2002, China UnionPay has taken advantage of its monopoly status to quickly grow its bank card network to the point where up to an estimated 30% of retail spending was made using bank cards in China’s tier one cities (Beijing, Shanghai, Guangzhou). The mobile payment industry, on the other hand, is still largely unregulated and most mobile payment companies, with the exception of UMPay, are independent startups. These m-payment startups, many of which boast foreign investments and/or partnerships, each operate payment platforms based on different technology platforms; they also target different markets and emphasize different mobile payment services. The open competition, however, has so far not translated into user adoption. Currently, mobile payment companies in total have only 12-15 million registered users. The stark difference in the regulatory environment has resulted in two payment systems - bank cards and mobile payments - that have, in the last few years, enjoyed opposite levels of success. In the long term, however, it will be interesting to see how the open competition in m-payment (and online payment for that matter) will develop. |
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