Chinese Banks Increasingly Push on Mobile Payments

It wasn’t so long ago when people were looking at the mobile payments market in the United States and wondering why banks weren’t using their elite combination of marketing clout and name recognition to go after the opportunities contained therein.

If even Starbucks could make a mint—or maybe a mint mocha frappe—out of mobile payments, then why in the world couldn’t banks do likewise? Chinese banks are starting to ask just the same question, and have their sights set on displacing Ant Financial and Tencent Holdings from the top slots.

With a market measured somewhere around $4.1 trillion at stake, the reasons to get involved are enormous. With big growth, and mobile devices increasingly as ubiquitous as mobile payments are becoming, having a horse in that race means access to potentially big money. With Chinese citizenry moving to mobile payments over credit cards, it’s leaving groups like state-owned UnionPay out in the cold.

However, that state backing may give UnionPay the whip hand in the end thanks to one major change; UnionPay is eagerly seeking the standardization of quick response (QR) codes, which would change the codes currently used by the private firms. The People’s Bank of China has yet kept quiet about such potential changes, however, and there’s no sign that such a change will come to pass.

UnionPay may have a real bludgeon on its side in state control, but there’s no sign that the state will acquiesce to the notion of being UnionPay’s crowbar to get into the field. If it doesn’t, then UnionPay and its contemporaries will have to compete outright.

Signs are already showing up suggesting such a measure may be in progress, as UnionPay’s making a case to the people that bank-based mobile payments might be more reliable going forward.

That’s a familiar case, and one that’s given banks a little extra push in the United States’ mobile payments market. While the Chinese banks may have a tougher time breaking in, especially given how long the mobile payments market has been around and how comparatively quiet the banks have been thus far—ask Microsoft how easy it was to break into an entrenched market with its Windows Phone line—it’s certainly possible.