Mobile Payments Becoming Massively Popular in China

Mobile payments in China has increased 707 percent year-over-year in 2013, according to the 2014 China Internet Financial Development Report published by the Internet Society of China (ISC) and Xinhua News Agency’s magazine, Finance World.

The number of Chinese making payments through mobile phones reached 125 million people last year, up 126 percent from the previous year, the report said.

But as mobile payments became more popular among the Chinese, ISC Deputy Secretary-General Shi Xiansheng warned of the security threats associated with online payments.

Xiansheng called for the improvement of technology and safety standards to prevent problems arising from online payments such as identity theft.

Chinese consumers made over 1.6 billion financial transactions through mobile phones last year and this figure equaled to US $1.6 trillion, the report added.

However, as the mobile payments industry continues to enjoy growth, the People’s Bank of China has planned to impose a cap on the amount of money that users could spend through their mobile phones, a move that might impact the industry.

China’s central bank was also mulling over similar curbs on mobile financial products including Yu’e Bao.

An online investment fund available for use on mobile phones, Yu’e Bao is Alibaba’s entrance into expanding its services past e-commerce and payments.

China also recently barred the use of virtual credit cards and QR codes for payments, at least temporarily.

Regulators said these restrictions were not imposed to crack down on firms providing mobile payment products but to safeguard consumers from security risks.