Android Pay: UnionPay's dream of near-field payment?

Mobile payment has penetrated into our daily life. Remote payment has long been common, and near-field payment has also reached a peak. Recently, UnionPay has made frequent moves in the mobile payment market, and has joined forces with many Android phone manufacturers to build the AndroidPay payment system, targeting near-field payment. In the remote payment market, Alipay Wallet is the only one in the market, and near-field payment is UnionPay's last chance to turn the tables. However, it is not so easy to develop near-field payment.

First, to win the support of mobile phone manufacturers and provide NFC modules for mobile phones, UnionPay needs to provide a certain amount of funds to subsidize manufacturers. If UnionPay insists on the "fingerprint recognition + NFC payment" model, fingerprint recognition will be a problem.

Second, to expand offline payment scenarios, in addition to updating the previous POS system, it is also necessary to expand small-amount payment scenarios such as public transportation and convenience stores. The equipment update costs generated by this are an inestimable expense and will infringe on many interests.

Third, cultivating user habits is the real challenge. Near-field payment is still too far away for domestic users, and most mobile phones on the market do not have NFC functions. The NFC-SIM solutions led by operators are also progressing slowly, so there is no hope for near-field payment in the short term.

Fourth, Alipay Wallet is also trying to develop near-field payment. In addition to having tested NFC technology, solutions such as QR code payment and sound wave payment are strong alternatives to NFC payment. Although there are certain security issues, the promotion cost is lower and the threshold for use is lower.

Fifth, in promoting near-field payment, UnionPay needs to balance the interests of many participants such as mobile phone manufacturers, commercial banks, and telecom operators. The relationships among them are quite complicated, and streamlining the entire mobile payment industry chain is a huge project.

Sixth, it will take at least a year for Android Pay to be launched on the market, and there will be many uncertainties during this year. The relationship between UnionPay and mobile phone manufacturers is not unbreakable, and the competitive and cooperative relationship between the mobile-dominated NFC-SIM method and UnionPay may not be stable.

However, UnionPay is still confident about this. Previously, China UnionPay has stated that the number of UnionPay Internet and mobile payment users has exceeded 150 million, the number of banks connected to the Internet and mobile payment field has exceeded 255, and the business layout has entered the scale stage. Among them, UnionPay has completed the construction of the TSM (Trusted Service Management) platform, which is connected with the TSM of operators and card issuers, allowing users to easily create and manage financial or other accounts through mobile phones, and complete payments through multiple methods such as near-field and remote.

UnionPay's mobile payment platform is based on the TSM system and, based on the "one card, multiple applications" technology, has established an "air card issuance", "air recharge" and "remote application management" system. The platform was officially launched on June 9, 2013. By connecting to the central bank, commercial banks, mobile operators and other operators, the contactless payment function is built into the mobile phone SIM card, supporting remote payment and near-field contactless payment.

UnionPay's 150 million users are a bit impressive, as its use on PC Internet is still relatively common, while there are not so many users of mobile payment. According to relevant statistics, by the end of 2013, the cumulative downloads of domestic mobile payment apps had exceeded 400 million times (excluding WeChat with payment functions), of which Alipay wallet accounted for as high as 58%, and all mobile online banking client software downloads accounted for 27%. It is not difficult to find that UnionPay has basically completed the mobile payment architecture, but lacks sufficient users.

In addition, according to iResearch's data from Q1 2014, mobile payments are mainly remote payments, and in remote payment scenarios, fund subscription (Yu'ebao, Licaitong and other money funds), personal applications (transfers, repayments, life payments) and mobile e-commerce account for 47.2%, 42.7% and 7% respectively. In the Q1 third-party mobile payment market, Alipay accounted for 76.2% and Tenpay accounted for 12.9%. Alipay has firmly occupied the market control position.

In other words, Alipay Wallet can already meet users' remote payment needs very well, while Tenpay has seized the remaining market share. In addition, independent apps of larger banks are also sharing part of the remote payment market. Users' demand for remote payment has been basically met, and they have formed a stickiness. It is relatively easy to develop near-field payment based on the user base of remote payment. However, UnionPay chose to avoid competing for remote payment and develop from the lack of practical near-field payment. Its possibility of survival is questionable.

Although the TSM system led by UnionPay has remote payment and near-field payment capabilities, mobile payment first competes on whose APP can exist on the user's mobile phone for a longer period of time. Whether Alipay Wallet, bank online banking APP and UnionPay APP can coexist is a question that UnionPay needs to figure out.

Whether it is remote payment or near-field payment, does UnionPay's mobile payment service have irreplaceable functions? If so, even if Alipay Wallet is larger in scale, there is still room for UnionPay to survive.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.