China's electronic payment data in the third quarter of 2015 (trillion yuan)
Card giant's Quick Pass faces tough rivalry with Alipay, WeChat
Bank card association China UnionPay, together with more than 20 commercial banks, on Saturday launched the Quick Pass payment tool, in a move to compete with third-party payment tools like Alibaba Group Holding's Alipay.
Major banks such as Industrial and Commercial Bank of China and China Construction Bank are among UnionPay's partners. By using Quick Pass, consumers can now get discounts at 25 retail chains such as grocery store Carrefour, fast-food giant McDonald's and health and beauty shop Watsons, according to UnionPay.
Quick Pass, based on near-field communication (NFC) technology, enables consumers to make payments by simply tapping their smartphones against payment terminals. Bank card information is stored in the smartphones.
With Quick Pass, UnionPay is aiming for a bigger share in China's surging mobile payment market, which is dominated by Alipay-like third-party payment tools, analysts said.
"UnionPay's experience as a clearing network will make it easier to reach cooperation deals with banks and merchants," Zhang Yi, CEO of consultancy iiMedia Research, based in Guangzhou, South China's Guangdong Province, told the Global Times Sunday. Zhang added that this is a major advantage of UnionPay compared with third-party payment tools.
Third-party payment tools Alipay and Tencent Holdings' WeChat Wallet have launched aggressive promotions recently. During a promotion at Carrefour on Saturday, Alipay offered a discount of 50 yuan for a minimum transaction of 100 yuan, according to its Sina Weibo account.
"Such moves will only increase users' loyalty," Li Chao, an analyst at Beijing-based iResearch Consulting Group, told the Global Times Sunday. Li added that Quick Pass is up against entrenched rivals, because consumers are used to making off-line payments via Alipay or WeChat Wallet.
Quick Pass now only works on smartphones that use the Android operating system. But users of Apple Inc's smartphones may also be able to use similar payment technology soon, as Apple is set to bring its Apple Pay to China in February 2016.
Media reports said in November that Apple has already reached agreements with UnionPay and the nation's major banks to bring Apple Pay to China. That payment system is also based on the NFC technology.
A spokesman of UnionPay told the Global Times on Sunday that the company has started to update the country's point-of-sales (POS) network to support the NFC technology and the process won't take long. He also said that technically, the network can be used by Apple Pay if the US payment system comes to China.
"It (the upgrading of the POS network) could accelerate Apple Pay's growth in China," Zhang from iiMedia noted.
Quick Pass also works for online payment, the company said. But Zhang said that although Quick Pass might win a share of the off-line payment segment, it will be hard for it to compete with Alipay and WeChat Wallet online, as major e-commerce platforms in China are backed by Alibaba and Tencent.
China's mobile payment sector soared 194.86 percent year-on-year to 18.17 trillion yuan ($2.81 trillion) in the third quarter, data from the People's Bank of China showed.
