Experts urge to secure the future of mobile payment

Much as online merchants are touting the benefits and convenience of mobile payments in China, shopping enthusiasts are mostly reluctant to pay via their mobile devices.

"The disproportionate growth of mobile e-commerce is mainly due to the stalled (mobile) payment, which largely dulls efficiency and user experience," iResearch chief analyst Cao Junbo said in an exclusive interview with China Daily on Thursday.

Statistics from iResearch Group, a Beijing-based consulting firm, show that mobile e-commerce transactions in the first quarter took up only 7.6 percent of total online sales, which climbed 36.6 percent year-on-year to hit 352 billion yuan ($56.89 billion) in the same period.

According to a survey by KPMG International on April 17, 2012, 84 percent of Chinese are willing to pay via their mobile wallets if it is safe, pleasant and convenient.

The country's smartphone penetration rate hit 66 percent by the end of 2012, and 3G subscribers exceeded 233 million, according to the country's three telecom carriers earlier this year.

EBay Greater China CEO John Lin said: "(Mobile) payment is a painful experience, if you don't overcome it. In many countries in the world, payment is a huge hurdle, because of security risks. If you have to enter your credit card every time, nobody will use it."

EBay is a global giant in the online marketplace, backed by its own third-party payment vehicle Paypal, which has helped eBay's mobile commerce penetration surge from zero to about 40 percent in the past several years.

"As long as you're on eBay's marketplace, you use Paypal to pay, and you already linked the two accounts. Everything you buy, we just automatically charge Paypal. This makes for a great experience on mobile," Lin said on Tuesday while attending the China E-Commerce Conference.

Third-party payment vehicles are now emerging as a preferred alternative in online shopping to ward off security risks. Data from iResearch show that as much as 61.3 percent of online buyers paid via a third-party vehicle in 2012.

Mobile payment stakeholders, including banks, telecom carriers, and third-party payment developers, are now striving to grab a growing piece of the pie in China. But it's premature to say who will be the winner, said Tang Bin, chief executive of Yeepay.com, at the Beijing conference Thursday.

The solution to the mobile payment dilemma could be in cooperation among China UnionPay and Chinese banks, since the pattern of embedded mobile chips has become a new payment method, according to Xu Jinyao, chief engineer at the mobile payment division of China UnionPay.

Mobile phone applications have been built to meet the different needs of e-commerce. To improve on-site payments and divided payments environment, China UnionPay has settled over 100 demonstration areas at airports, school campus takeaway shops and small business retailers.

According to Lin, payment mechanisms have to convey a very simple and pleasant end-to-end shopping experience, including the mobile payout process, logistics tracking, user protection, and after-sale services.

"Payment vehicles are a very interesting product. It's about trust and convenience. But this cannot be built overnight," Lin added.