Xiaomi CEO Lei Jun wants a piece of the mobile commerce market. (Photo : Getty Images)
Chinese smartphone makers are now adding for facilities to enable people to pay using their smartphones. Analysts believe that smartphone sales will be gain more revenue because of this.
Xiaomi recently revealed that their mobile phone payment system, MI-Pay. Analysts think that they will soar above competitors with this scheme.
The mobile phone maker also formed a partnership with UnionPay, China's national card association.
MI-Pay is also supported by 10 major banks and can replace bus passes and metro cars in Shenzhen and Shanghai.
Xiaomi's move to enter into mobile payments follows rivals Apple and Samsung establishing their respective Apple Pay and Samsung Pay.
Huawei was also reported to have entered into a partnership with the Bank of China to offer payment services from their mobile devices.
Li Chao, an industry analyst at consultancy iResearch Consulting Group, believes that manufacturers are seeking other forms of revenue because of the slow revenue growth in the market.
He said, "Those phone makers can no longer bank on smartphone sales revenue to make a profit. Instead, they are looking to establish their own mobile 'ecosystem' and explore the value in their large user bases to increase the amount of consumption per device."
However, other analysts believe that the smartphone manufacturers are all rushing to grab a piece of the 5.97-trillion-yuan market.
Wang Yanhui, the secretary-general of Mobile China Alliance, said, "The figures are so stunning that mobile sellers are all flocking to grab a piece of the pie."
He added, "When an activity involves the interests of more than one party, it is hard to control the process as well as launch corresponding promotional activities."
Wang believes that mobile payment facilities are using near field communication (NFC) and therefore have the advantage than internet-based applications like Alipay.
He said, "The use of WeChat and Alipay rely on the Internet, while NFC-based payment can be used where Internet connection is weak," Wang said. "The newcomers can explore new areas under this scenario. The bus pass, which will be part of the program released by Xiaomi, is a good example."
