Payments made via near field communication (NFC) technologies embedded in mobile devices reached RMB 9.9 billion (USD 1.4 billion) in the fourth quarter of last year in China, up 51% year-on-year (YoY), according to a report released by market research firm iResearch on Monday.
This is a sharp increase compared to the overall yearly increase in mobile payments as a whole, which reached RMB 59.8 trillion (USD 8.4 trillion) in transactions in the fourth quarter, up 13.6% year-on-year. However, NFC transactions still accounted for a tiny 0.016% portion of the market, while payments made via QR codes reached RMB 9.6 trillion, accounting for 16%. The majority of mobile payment continue to be made through other methods, such as banking apps and transfer payments, although the specifics were not disclosed in the report.
NFC refers to the capability of one electronic device to communicate with other devices via proximity. For example, an NFC payment might entail one person transferring another person money by rubbing their smartphones together.
JD Shanfu, which is owned by a subsidiary of JD.com’s fintech arm called JD Digits, took the largest share in the NFC payment sector, boosted by its growth in payments for public transportation services, said iResearch, adding that Shanfu can support payments for buses and subway fares in 700 cities in China. iResearch did not provide detailed market shares of other companies in the NFC payment sector.
Out of the total number of mobile payments that occurred during the quarter, a total of 55.3% of transactions were for repaying credit cards, money transfers between banks, and paying utility bills.
Mobile consumption, or payments for e-commerce services, ride-hailing, mobile games, group-buying, and physical purchases, made up 24.5% of all mobile payments, while transactions for online financial products such as money market funds and peer-to-peer loans accounted for 18%, according to the iResearch report.
JD Digits’s payment arm JD Pay, which also owns other payment products like Baitiao, a virtual credit card, took 0.9% of China’s entire mobile payment market, making it the fourth largest player as of the fourth quarter, lagging behind Yiqianbao, Tencent’s Tenpay, and Ant Financial’s Alipay.
Alipay took 55.1% of the pie in the fourth quarter. Its presence has increased last year as its market share grew from 53.8% in the first quarter to 54.5% in the third, according to iResearch’s earlier reports.
Tenpay, which owns WeChat Pay and QQ Wallet, accounted for 38.9% of China’s mobile payment market. However, its presence has been slightly dwindling as its market share dropped to 39.5% by the third quarter from 39.9% in the first.
Zhang Yu, the author of the report, told KrASIA on Wednesday that the gap between Alipay and Tenpay was mainly due to Tenpay’s relative weakness in offering online financial products offered in other Tencent platforms like WeChat.
Ant Financial, Tencent, and JD Digits (JD.com’s fintech arm) all declined to comment to KrASIA‘s request for comments.
