China Telecom launches mobile payment service

China Telecom has announced plans to introduce a mobile payments service to its eSurfing 3G subscribers, allowing them to pay credit card and phone bills or transfer money via their mobile phones, according to a report.

News site ChinaTechNews.com reported Monday that the service will be launched in Beijing initially and will not require customers to upgrade their mobile handsets to use the function.

To access the service, users will need to change their SIM cards for a mobile payment card which would upgrade their phones into payment terminals without affecting existing services. Called the User Identity Model (UIM) card, the card was developed by China Telecom in collaboration with local banking card provider, China UnionPay.

Subscribers can link up to 10 banking card accounts with the UIM card, which will be offered to users for free, and start using their financial services via their handsets, the report noted. Customers can activate the service at three of the mobile operator's "business halls" in Beijing, which are located in Xidan, Wudaokou and Guangqumen.

Last year, Gartner identified Asia-Pacific as the leading region in mobile payment adoption, with the number of users hitting 62.8 million by end-2010 and accounting for over half of the global figure of 108.6 million. The research firm attributed the growth drivers of this demand to emerging markets which have a large "unbanked" and "underbanked" population.