China Mobile and China UnionPay announced on Sunday the launch of an NFC service and mobile wallet, integrating China UnionPays contactless payment QuickPass with China Mobiles mobile wallet services.
So far, the joint platform will function in at least 14 major cities and is already available with nine banks, including Bank of China, Shanghai Pudong Development Bank, China CITIC Bank, China Merchants, China Everbright Bank, China Guangfa Bank, Bank of Beijing, Bank of Shanghai, and China Minsheng Banking Corp.
UnionPays contactless payment scheme is supported on 1.2 million QuickPass point-of-sale terminals, but it is not yet clear whether all are activated.
The mobile wallet will have about 500 KB of space available in its NFC SIMs for applications, including support for transit cards, campus and corporate ID cards, city cards, coupons, membership and loyalty.
While there are currently 5 NFC enabled phones that can support the NFC-enabled wallet, China Mobile has mentioned that it plans to distribute more than 10 million 3G NFC phones this year as well as to introduce more models.
Its still unclear how China Mobile and China UnionPays collaboration will pan out as the service is introduced. However, according to their agreement, China UnionPay and are working together on the SWP-SIM technical specifications of the mobile wallet.
Both companies are optimistic about the untapped opportunity of the NFC mobile payment market, despite global reports of low NFC adoption. Due to disappointing adoption of NFC in 2012, with even high-profile Google Wallet struggling to gain traction, a report by Gartner estimated that the value of NFC transactions will drop by 40%.