The report focuses on some of the emerging growth opportunities for mobile commerce in China, highlighting some of the growing challenges: Senior citizens and women make up more than 10.7% of the Chinese population or about 150 million individuals. The report states that this is an enormous potential market for mobile commerce in China. However, despite the explosive growth of mobile commerce over the past two years, there are still certain underserved regions such as the countryside.
With the economic situation in China is becoming so unpredictable and with so much of its population living in apartments, most people do not have access to a bank account, credit card, or other financial service providers. Most of the Chinese population rely on cash transactions to meet their basic needs, making the adoption of mobile payment systems for payment particularly appealing for businesses in the country.
Although mobile payment systems are widely accepted in all parts of China, the penetration of this technology is still minimal in the countryside. The main reasons for this are lack of familiarity with mobile phones and the belief that mobile money systems are unsafe and insufficiently secure.
In some provinces in northern China, mobile payment systems have not been introduced yet. As more regions move into greater competition with one another for market share, people will start to view mobile payment systems as an inevitable part of life in China. At the same time, this is an opportunity for merchants to gain a foothold in a highly lucrative market. If they succeed, it can boost their revenues tremendously.
Of course, merchants have to be very careful when introducing a mobile payment system into the market, especially in cities like Beijing, where the majority of merchants use credit cards. For example, one of the largest mobile payment network providers in Beijing, Qidian, is under fire from Beijing’s government for a new mobile payment system called PayQi.
Qidian has several features that consumers prefer, such as safe online payments and quick transactions. But the government is worried that these features could lead to identity theft and fraud, which will negatively impact the overall security of credit cards used in shops. In addition to this, Beijing’s government is worried that Qidian is not complying with regulations for issuing digital license.
According to Baidu, a leading search engine in the Chinese internet, the main concern of the Beijing government is that PayQi offers information that is unreliable. Baidu claims that the service has no security measures in place and that users will have difficulty in determining if their payment is secure. Another problem is that the company is developing mobile wallets for customers, something that would not be allowed in major cities like Beijing and Shanghai due to safety issues.
Baidu is right on both counts: payments made via mobile phones are unsafe. It is also true that a mobile wallet cannot guarantee security.
As for security, the lack of security measures in the service makes mobile payment services very risky. When you are paying with a smartphone, the risk that hackers may target your personal information is extremely high.
This personal information includes your phone number and pin code, the name of the user and other important security features. As for the payment security of mobile wallets, most users in cities like Beijing will not trust them because the wallets are designed to use a random number, and do not have security features.
If you want to make use of mobile payments systems, the best thing to do is to test them first. You should avoid making purchases using a mobile phone that is not a known brand or network.