Trial of true mobile payment begins in Shanghai

“Mobile payment” is a large category. It covers everything from using SMS to confirm your credit card in a retailer, to simply ordering an item over the mobile internet. But for me, the true meaning of “mobile payments” has always been to actually use your device as a payment method. Combining NFC with mobile devices, you could just wave your mobile over a reader at check-out to pay for your goods. This already works well with cards (like the Oyster card for the London Underground), and the same technology can simply be placed in your phone. Today, China Mobile and a Shanghai-based tech firm, SEIMMA Tech Co., have launched a mobile device payment trial in Shanghai.

How does it work?

It’s based around SIM cards – people in the trial replace their regular SIM with a customized RF UIM card. This card allows you to pay by swiping your handsets on readers at the point-of-sale. The trial only comprises 200 readers and 1,000 RF UIM cards in Shanghai, but if it is successful it could lead to a roll-out all over China – initially in the south of the country.

What are the security issues?

A major problem with mobile device payments is security – if someone steals your mobile, they also get to pay for a load of stuff from your bank account. The China Mobile trial has two methods to counter this. First, the maximum amount you can spend in one go with your device is 1,000 Chinese yuan – around $150 or €100. Second, users can set passwords for the phone to be used – like a PIN for your credit or debit card.

What we think?

I think the major plus point for this trial is that the technology is contained entirely on a replacement for your SIM. You don’t need to change your device. For those in the trial run I imagine it’s quite annoying to have to change your number, but if this technology was launched on a wider scale people would have it in their device from the very start. And since it’s on the SIM, if you buy a new you just switch your mobile payment account to the new device. I’ll be interested to see how this trial pans out.