China Mobile launched "and package" unsuccessful, NFC payment still has problems

People seem to forget that as early as a few years ago, China Mobile launched a similar service "and package." The strange thing is that the "and bag" business, which also caused a rush at the time, seems to have disappeared. So where is the problem?

Recently, major mobile phone manufacturers have had some big moves in their payment methods. Apple, Samsung, Huawei and other brands have successively entered into a partnership with UnionPay, and Apple Pay, Samsung Pay and Huawei Pay have also been born.

The era of mobile payment 2.0 based on WeChat and Alipay has not yet passed, and the wave of NFC (near-range wireless communication) payment 3.0 era led by mobile phone manufacturers has risen, which means users will have a more convenient payment experience and also make mobile phones Vendors have discovered a new field.

However, people seem to forget that China Mobile has launched a similar service "and package" a few years ago. The strange thing is that the "and bag" business, which also caused a rush at the time, seems to have disappeared. So where is the problem? What problems will NFC pay when it wants to develop in China?

First, China Mobile test water NFC payment, "he package" has achieved brilliant results

NFC, or near field communication, also known as short-range wireless communication, is a short-range high-frequency wireless communication technology that allows non-contact point-to-point data transmission (within 10 cm) to exchange data between electronic devices. NFC provides a simple, touch-enabled solution that allows consumers to easily and intuitively exchange information and access content and services.

The NFC payment method is based on this principle. The bus cards of many first-tier cities in China have applied this technology many years ago, which has inspired some operators who have mastered SIM cards and communication technologies.

As early as 2010, China Mobile launched a mobile payment service that was regarded as the predecessor of “He Bao”. Sun Ren, marketing manager of mobile payment products at Infineon's Smart Card and Security Division, said that operators such as China Mobile had a very positive attitude towards the development of NFC payments. This positive attitude is reflected in the actual action, which is to cooperate with financial institutions to expand the payment method from the traditional field to the non-financial institution.

The business opportunities of “and package” are mainly reflected in two aspects.

On the one hand, the user can perform binding management on the e-card application through the client, which is equivalent to binding the service of the user and the operator together, so that the operator can obtain more user resources.
On the other hand, the cooperation between the operators and the NFC business and the merchants is conducive to expanding their business lines and entering the payment field, which will enable the future commercial layout to be broader.

At the time, market conditions were not yet mature. Embedding the functions of social applications and people's livelihoods, such as campus applications, corporate community applications, and transportation cards, into the mobile phone, so that the daily rigid demand of the user base is satisfied, is the plan for the future of mobile.

But at the time, it was not easy to achieve these. Taking the mobile phone bus card as an example, first of all, it is necessary to discuss cooperation matters with each bus company one by one to ensure the smooth communication between the bus system and the mobile phone business. Secondly, it takes time and effort to test and operate the operation, and customize the development system for this purpose. In addition, this method needs to be popularized among users to promote the business.

Although turning a mobile phone into a bus card is a problem, after a hard work, China Mobile has achieved success. At present, there are more than 50 public transportation applications supported by “Hebao”, and it has covered many first- and second-tier cities and some third-tier cities.

In addition to public transportation, “He Bao” has also achieved brilliant results in other fields. According to the data provided by China Mobile, so far, the number of registered users of Hehe has exceeded 150 million, and the annual transaction scale has exceeded 600 billion yuan. In the field of near-field payment, and the package NFC platform has launched 200 payment applications, becoming the industry's largest NFC application platform.

Despite the glory, but the brand effect in the mobile payment market did not appear to match its investment, after all, failed to form a rising trend. Nowadays, more than one "Pay" has appeared one after another, making the sense of existence less strong and the package in a more embarrassing situation.

So, where is the problem with "and package"? Can the development of new payment methods be smooth in China?

Second, the "and package" problem has repeatedly failed, and NFC payment is still difficult to develop in China.

The first major problem encountered in the development of "and package" is the dispute over technical standards with UnionPay. At that time, the mobile payment field had two operators, the operator system led by three major operators and the financial system led by UnionPay.

In general, cooperation and competition coexist between the two camps. However, based on their respective advantages, both parties have the self-motivation to promote their own payment technology. Therefore, these technologies involve the layout of interests behind them, which makes it difficult for both parties to compromise, and thus falls into a game of stalemate.

Specifically, the core of the game is on-site payment. Among the three on-site payment methods based on RFID (Radio Frequency Identification), the support for UnionPay is NFC and SIM-Pass at 13.56MHz, while the support for China Mobile is RF at 2.4GHz. SIM technology.

The intention of China Mobile is to integrate RFID modules, antennas and application information into the SIM card. In this way, users can experience this series of functions simply by changing the card. Whether it is from the perspective of mobile phone cost or business control, this is the best choice for operators.

However, the problem is that the working frequency band of RF-SIM is inconsistent with the POS machines in industries such as banks and public transportation. If you want to achieve the goal, unless you move yourself to replace these POS terminals, the cost of doing so is too great, and UnionPay is not willing to cooperate.

In addition, the NFC penetration rate of the smart terminal market is lower when the “and package” enters the market. At that time, the mainstream in the market was the magnetic signal pos machine, and the merchants with NFC POS machines were still a minority. Due to market restrictions, most users cannot use the service.

In fact, not only the “and package” business, but also the “Wo Pay” and “Wing Payment” that Unicom and Telecom have launched have not developed. Looking at the world, NFC mobile payment applications such as Google Wallet and Square, which are involved in the mobile payment field in advance, have not been successful.

In fact, to promote the development of NFC payments, the integration of operators and financial institutions is a necessary stage. Neither the operator nor the UnionPay can support the NFC payment industry on its own. However, the contradiction between the two camps is not small. The third-party payment provider Ping++ CEO Jin Yiye believes: "The two camps missed the opportunity of development in the game." In the end, the NDRC handed over the dominance of technical standards to UnionPay in order to avoid cross-disciplinary monopolies. Although the two sides have now compromised, the operators are finally at a disadvantage.

Although UnionPay has the upper hand, it is still difficult to promote mobile payment methods in China.

First, China's financial regulations are strict. This has created a lot of resistance to the development of mobile payments.

Second, China's chain business is relatively backward. Especially in the third- and fourth-tier cities, the highly developed chain business is a necessary condition for the popularization of mobile payment.

Third, there is a lack of open mind. In China, all the big players want to take advantage of the upstream and downstream of the industry chain. UnionPay cannot control the mobile terminal. Operators cannot grasp the POS business like UnionPay.

It can be said that the mentality problem is the main reason. The technical standards are only the confrontation between the surface layers. What really hinders the cooperation between the two camps is actually the business model of various minds. Liu Chunquan, deputy director of the Policy and Law Committee of the China Electronic Commerce Association, deeply felt: "The two major factions have spent too much energy on the game of the NFC payment standard. The mobile operators' payment products have not been done, and the degree of marketization has also been It is not high. Therefore, it gives the Internet company the opportunity to scan the code payment and online payment application."

With the advent of the new era of mobile payment, operators seem to have a turning point in the field of NFC payment, but the management methods of state-owned enterprises of the three major operators do not seem to be suitable for the development of mobile internet services. Although Apple Pay's use of UnionPay to enter the mobile payment field is likely to produce a "squid effect." But whether large state-owned enterprises can compete with technology companies is still unknown.

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