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China is world's largest proximity payment market

The use of proximity payments from mobile phones has doubled in China over the past year.08 Jun 2016

Proximity mobile payments are payments made with a mobile phone using near-field communication technology. An estimated 195.3 million people will use the technology in China in 2016, up 45.8% since last year, according to a survey by eMarketer.

By 2020, almost half of all smartphone users in China will use the technology, eMarketer predicted.

The US, by comparison, will have 37.5 million proximity payment users this year.

China's rapid adoption of the technology is due to several factors, the research company said. China does not have a strong credit card culture, and has jumped from cash to mobile payments. The widespread use of online payment systems Alipay and Tenpay have also boosted use of proximity payments, and Chinese smartphone users are more willing to experiment with noncash payments than users in most other countries, eMarketer said.

Despite the high numbers of people using the technology, eMarketer said there is still a large untapped market in China, with use currently concentrated in larger cities.

As in other countries, growth is limited in part by retailers being slow to upgrade their systems to accept mobile payments, it said.

Mobile e-commerce is also growing fast in China, with 72% of smartphone users expected to make at least one purchase on a mobile phone browser in 2016, eMarketer said.

In December 2015 Apple and Samsung both announced partnerships with Chinese payment service UnionPay to bring Apple Pay and Samsung Pay to the Chinese market in early 2016 after "tests and certification" by Chinese regulators.

China announced in April 2015 that it would open the market for clearing domestic bank card transactions to allow competition from foreign companies including Visa and MasterCard. Previously only UnionPay was allowed to provide clearing service for RMB-denominated bank card payments.