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Update – 09/16/09: According to a report on Sina.com, 3G mobile payment handsets (“wave-to-pay”) are now undergoing trials in Shanghai. No details yet on the hardware/software modifications necessary to activate wave-to-pay.

Swipe-to-pay mobile payments are nothing new in Japan and Korea. iPhone’s authorized carrier in Japan, Softbank, has a “Felica seal” (sticker) that can be applied to the back of an iPhone. When swiped near a payment terminal, a tiny NFC chip (embedded in the “Felica seal”) will transmit identifying information that is used to complete the transaction.

China Unicom’s 3G handsets might be equipped with external stickers (fitted into a case or applied directly to the phone) or possibly via NFC chips that are embedded directly into the carrier’s SIM card (out of sight).

No word yet on whether “wave-to-pay” will be included on the iPhone for China? If Shanghai Unicom’s premature advertisement (March ’09 faux pas outlined below) is any indication, then mobile payments is very much in the works for iPhone. While public transportation is the most obvious use for NFC mobile payments (a quick swipe of the phone will open the subway turnstile and register a payment), many other retailers might jump on the wave-to-pay bandwagon. Think Starbucks, KFC, McDonalds, and many other “get ‘em in and out quickly” food stores and retailers.

Not all mobile payment services involve the swipe-to-pay (NFC chip) method. There are many services in North Asia that are more akin to Pay-Pal services for mobile.

Mobilians and Danal are the dominant providers in South Korea. Danal is popular among young Netizens who often don’t have credit cards and want a quick, easy way to pay for “digital goods” such as music/video downloads and virtual goods in games (e.g. swords and guns).

China Mobile has a mobile payments venture (UMPay service) with approximately 40 million registered users. Alipay, owned by the giant Alibaba Group, and 99Bill have also set up mobile payment services in China. A growing number of subscribers are using these services to pay their wireless bills. Yet, in China, mobile payments still lags far behind the most common payment method … cash.

Thanks to Lan and Boxerconan for providing tips and links for this post

China Unicom Promoting 3G services and iPhone

Update – 03/27/09: China Unicom executive mgmt in Beijing have now “explained things” to the Shanghai subsidiary. The flashy iPhone images and special page used to promote 3G services are now no where to be found on the Shanghai Unicom website.  This is no surprise as the over eager Shanghai subsidiary was a mite early in their promotion. Read more > HERE

For those that have not heard the news, China Unicom’s Shanghai subsidiary is now promoting iPhone 3G and their new WCDMA network on their website. The Shanghai subsidiary website is careful to never say that Apple and China Unicom have reached an iPhone deal (iPhonAsia does not expect any official announcement until May 17) but the parent corp and Apple might have preferred a bit more discretion.

Here is the page on the China Unicom site promoting iPhone 3G services, that might be available soon, including:

• Wave-to-pay
  
• Mobile TV (CCTV has been heavily promoting this in China)
  
• Tethering
  
• Video Conferencing
  

Of particular interest is the wave-to-pay promotion. Untold millions of Chinese commute to work via trains, subways and ferries. Any device that can simplify daily e-commerce would be a major value-add. Here’s my attempt to translate (from Mandarin) the China Unicom webpage:

“Near-Field-Communication (NFC) swipe card handset a.k.a. “wave-to-pay,” offers convenience for those who use public transportation. It’s possible to use a handset swipe card to buy a ticket. This wave-to-pay has replaced the former public transportation IC card. Using the swipe card handset for shopping eliminates the needs to carrying cash. Using wave-to-pay also makes it easy to pay in the ferry terminal. Through the swipe card, the handset (phone) can purchase your passage and avoid the worry of lining up to purchase tickets. Not only does this technology eliminate the need to carry a public transportation IC card, you don’t even need a bankcard. All you need is the wave-to-pay handset (phone), to buy a ticket and do your shopping. One machine in the hand, opens access, and gives you control. Wave-to-pay makes life more convenient.”

Here’s Google’s >

Tags: Alipay, China Mobile, China Unicom, Danal, iPhone 3G, mobile payments, mobile wallet, Mobilians, Shanghai Unicom, UMPay, wave-to-pay, WCDMA