Looking at the prospect of China UnionPay mobile payment layout from China Mobile's 2016 terminal planning

The problem facing China UnionPay is, first and foremost, how to decide how to implement the mobile payment layout. After all, the scale of the mobile terminal based on the NFC payment method will be placed there in the next few years.

No matter how the future of mobile Internet applications changes, the importance of mobile payments will not change much. It is no exaggeration to say that the mobile payment portal will be a larger entrance than social platforms such as WeChat and QQ. It is also the emergence of WeChat payment that further consolidates the status of WeChat. Therefore, the battle for mobile payments is the most violent area for competition between Internet giants, traditional banking finance, and cross-border competition.

Just as telecom operators are in the data service era, traditional short-tone and voice-based services are struck by the Internet enterprise OTT. China UnionPay, which is traditionally in the absolute position, also faces third-party payment channels such as Alipay and WeChat payment in the third-party payment field. It is possible for OTT again. Although it faces protection from the policy level in the relevant financial sector, the role of such policy protection will become smaller and smaller in the face of strong market demand. Therefore, under this pressure, China UnionPay began to target the new mobile payment layout of Alipay. What is the prospect? This article analyzes the basic experience of the latest mobile payment products launched by China UnionPay and the latest new data released by China Mobile, as another perspective to examine China UnionPay mobile payment services.

I. China UnionPay mobile payment new product introduction and experience issues

On December 12, 2015, China UnionPay and more than 20 banks and other institutions held a product launch conference in Beijing, “UnionPay cloud payment, leading the new era of mobile payment”. According to the introduction of the conference, the so-called "cloud flash payment" is a payment method based on NFC-based HCE and Token technology based on smart phones. The user only needs a smart phone with NFC function, and the operating system is Android 4.4.2 or higher, and can directly generate a "bank card" virtual card of the UnionPay card in the mobile banking app, that is, the cloud flash card. Then, with the mobile phone, the mobile payment can be completed online on the online POS machine with the UnionPay "flash payment" logo. “Cloud Flash Pay” can directly pay for mobile phone payments without the steps of unlocking, opening the screen and APP. Compared with Alipay and WeChat payment, it is more convenient to open the APP, scan code and network confirmation before completing the payment. In particular, it does not involve networking of data networks. It is said that tens of thousands of physical stores in 25 national chain and industry famous merchants such as Carrefour, Watsons, Family, McDonald's and COSTA have launched the “Cloud Flash Payment” payment experience.

From the introduction of the basic functions of UnionPay “Cloud Flash Pay”, the basics are smart phones with NFC function, and the convenience aspect seems to be faster than Alipay and WeChat payment. At the same time, it also highlights the security features of replacing the physical card with a replacement card to prevent leakage, storage dynamic encryption and transaction quota and password protection. However, according to the information on the "Cloud Flash Payment HCE Product Use Tutorial" published by China UnionPay related channels, the NFC-based operation is for users who are used to Alipay and WeChat payment, personally think that changing habits and educating users It is more difficult. From the perspective of UnionPay, the layout of mobile payments along NFC-related technology solutions has its business inheritance factors. This is bound to determine that China UnionPay will pay a higher price on the road of promoting NFC mobile payment.

The following is a screenshot of the "Cloud Flash Pay HCE Product Usage Tutorial". Seeing this content, the individual has almost no desire to use cloud flash.

In other words, the so-called better user experience embodied in the conference is based on a smartphone that already has good NFC payment terms. However, for most users, it is obvious that users who want to become NFC payers seem to have only a few small steps, but the effort is great.

Second, look at the issue of China UnionPay mobile payment from China Mobile's 2016 terminal product planning

On December 14, 2015, the 2015 China Mobile Partner Conference with the theme of “Mobile and Powerful Internet Plus” was held in Guangzhou. During the meeting, China Mobile Communications Group Terminal Co., Ltd. released the "China Mobile 2016 Terminal Product Planning" report.

According to the report data, from January to October 2015, the top 10 mobile phone brands in China Mobile's 4G market were Apple, Xiaomi, VIVO, Huawei, OPPO, Samsung, Coolpad, Lenovo, Meizu and Gionee. Therefore, from the point of view of terminal coverage, China UnionPay's NFC-equipped smartphones are basically covered except for Apple. But first of all, I temporarily lost the big user group of Apple.

Involved in the 2016 plan, China Mobile Group said: In 2016, China Mobile will vigorously develop 4G users, and strive to reach 500 million 4G users in 2016, with terminal sales reaching 330 million, of which 4G mobile phones are more than 70%. It seems that the terminal size is large enough, but on the NFC-enabled mobile phone, China Mobile's customers in 2016 are only 10 million, not even a fraction. China Mobile is still such a plan, presumably China Unicom and China Telecom will not be too large on the NFC-enabled mobile phones. This means that China UnionPay has encountered huge problems in the prospect of user scale in promoting the NFC mobile payment model. Whether this situation can be improved within three to five years is a big doubt!

Therefore, from the perspective of relevant data from operators, China UnionPay’s high-profile announcement at the press conference to vigorously develop the “cloud flash payment” layout of mobile payment efforts, the prospects are not optimistic.

3. Will the promotion efforts of China UnionPay provoke a new payment war?

The previous analysis is only a limited perspective from the general experience of “cloud flash payment” and the side data of China Mobile regarding NFC function terminals. Judging from the efforts of China UnionPay in the past year or so, China UnionPay has been increasing its operations at the operational level in order to avoid the so-called OTT problem. For example, from the end of last year to the beginning of this year, during the New Year's Day and the Spring Festival, some large-scale supermarkets have carried out unprecedented promotional activities - supermarkets purchase 100 yuan directly minus 38 yuan coupons snapped up (persons noticed that UnionPay chip cards start with 62 , 100-38 = 62, only this marketing idea), the activities at that time caused a positive response from users. Therefore, in order to promote the “Cloud Flash Payment” product, China UnionPay, in the case of the product itself has experience problems and limited core function NFC mobile phones, in order to channel certain effects, it is necessary to consider adopting similarly large marketing subsidies. The way to stimulate users. From the user's point of view, in the case of a small difference in basic functions, the most important thing is undoubtedly the strength of the offer. If this method is adopted, how should third-party mobile payment platforms such as Alipay and WeChat payment take over? Personally, there is a new round of payment wars with greater intensity and longer duration.

However, the more rational analysis angle gives me the expectation that if UnionPay is unable to make a breakthrough in the key solutions of mobile payment, it will continue to walk along the old path of NFC, unless it is protected by a stronger policy. It is difficult to obtain the size of the user through continuous and large incentives, which is not as good as the way of burning money for taxi software. And to adopt a new solution, it seems to be a big problem. Therefore, the problem before China UnionPay is first and foremost how to decide how to implement the mobile payment layout. After all, the ceiling of the scale of mobile terminals will be there in the next few years.