YeePay recently announced an innovative (if somewhat roundabout) payment solution for 3G.cn, a leading Chinese WAP-portal. 3G.cn users were already able to buy its products and services -- which include games, email, e-books, forums, and ringtones -- through China Mobile's Monternet and China Unicom's Uni-info platforms.
The new service also uses the mobile operators' platforms. A user first purchases a prepaid Easyown card (a.k.a. Shenzhouxing, China Mobile's most basic and most popular prepaid service) and then enters the account number and PIN on the card to make the payment. After payment is complete, the remaining sum is transferred to the user's YeePay account (if it exists) or into a new account, which the user is given the option of opening. Th card can no longer be used to top-up one's mobile account directly; however, YeePay does offer just such a service, so once the funds are in one's YeePay account, they can be used for mobile top-up.
This is different from traditional operator-centered payment methods, in which the top-up card funds are first transferred into the phone account, where they then can be used for payments. It also differs from existing WAP-based mobile payment services, which generally require linking one's mobile number and bank account. And while Chinese consumers have been able to use mobile top-up cards for topping up their online (internet) payment accounts, this new service specifically targets mobile payment users.
Many consumers are wary of linking up their mobile numbers and bank accounts. By avoiding such a need and by partnering with the ubiquitous Easyown/Shenzhouxing brand, YeePay is giving China's fledgling m-payments market another push in the right direction. Of course, YeePay may only have been able to provide this "anonymous" payment method because of the news that Easyown/Shenzhouxing would require real-name registration sometime this year.
While mobile top-up has a lot going for it, the fact remains that it has not caught on yet. We see several factors behind this:
While all major MPSPs above offer mobile top-up transactions, few are promoting it. Smartpay and YeePay are the only two that have paid much attention to top-ups, and both of them deal primarily with China Unicom, by far the smaller of China's two mobile operators. UMPay, a joint-venture between China Mobile and bank card network operator China UnionPay (and thus the best positioned of all MPSPs to work with China Mobile), has yet to show much interest in promoting mobile top-up to China Mobile's 225 million prepaid subscribers.
Mobile top-up allows users to add value to their mobile accounts without having to purchase top-up cards, which are most often found at supermarkets, convenience stores, and newsstands. More than any other product or service currently in development, mobile top-up has all the ingredients to become the driving force behind m-payment adoption in China.
China's m-payment industry is stuck in a rut, with little consumer demand and no comprehensive network of operators, banks, and merchants available that can match the selection, prices, and convenience of online or bricks-and-mortar payment.
Rather than pooling their limited resources together to benefit the industry as a whole, China's mobile payment providers are going at it alone, each aiming for total domination of the market. Many are attempting to offer a wide range of services all at once and are concentrating on expanding their complex partnership networks. While they do continue to make progress in this area, user growth continues to lag behind.
Right now Chinese consumers can already pay for a wide variety of products and services via m-payment:
Wireless value-added services (WVAS), including SMS, MMS, ringtones, ringback tones, and WAP-based services. (NOTE: In this report we do not discuss the WVAS sector, as our focus is on the vast majority of products and services outside the operator-controlled systems through which WVAS are bought and sold.)
Phone and other utility bills
Ticket reservation and purchase (including lotteries, air flights, movies, etc.)
Mobile banking
Why, then, have none of these services besides WVAS become popular or profitable?
