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UnionPay to spend $32m on online payment

By Wu Yiyao in Shanghai | China Daily | Updated: 2014-05-28 06:56

China UnionPay Co Ltd, a bankcard association, will spend 200 million yuan ($32.02 million) to promote its payment functions and services to cardholders, the company said on Tuesday.

Third-party payment services are taking an increased market share, it said.

The promotion is to change cardholder habits from swiping cards to paying with phones. It's something widely seen in China and has created business opportunities from online to offline payment channels, Hu Ying, assistant president of China UnionPay, said.

China's online third-party payment market is worth 5.4 trillion yuan ($874.37 billion) and may more than double in the next four years, according to iResearch, an Internet market research service provider.

Transactions of some 250 certified third-party payment service providers in China totaled 1.72 trillion yuan in 2013.

Growth in the third-party payment market lies in investments because money market funds distributed online are becoming increasingly popular among investors.

According to Barclays Research, these funds account for less than 1 percent of more than 100 trillion yuan held in bank deposits at end-2013, but their assets have swelled by an average of 93 billion yuan each month from July 2013 to January 2014.

China's central bank introduced rules to guide development of the third-party payment market in March. It suspended digital credit card services and payment by scanning a barcode or quick-respond code with a smartphone to address concerns about protecting cardholders' payment securities.

Cardholders of China UnionPay cards with initial card numbers of 62 may have discounts when they use them between May 31 and June 2, during International Children's Day and China's Dragon Boat Day, by swiping the card or using Wallet, a smartphone application platform, UnionPay said.

Cardholders can download and use coupons, vouchers and join other promotion programs, the card association said.

China UnionPay will strengthen its role as a payment service provider and provide an open platform to help card issuers and holders, said Shi Wenchao, president of China UnionPay.

"Our goal is to appeal to more cardholders, so they are willing to complete transactions via UnionPay and enjoy more services and products of the UnionPay card," Shi said.

Market insiders and analysts said payment service providers need to expand mobile payment to win more market shares in the future.

Mobile payment will expand at a fast pace in the next two years. It's estimated the value of transactions completed via mobile payment will reach 4.1 trillion yuan by 2016, some four times of that in 2013, said Zhang Meng, an analyst with Analysis International in a recent note.

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