FSC Has Agreed to Allow Banks Buying Into Mobile Payment Platform Company

Taipei, Sept. 11, 2012 (CENS)--The Financial Supervisory Commission (FSC) has agreed to allow banks buying into mobile payment platform company organized by five major telecom carriers and EasyCard Corp, so as to tap the massive mobile-payment business potential. Ten banks have taken part in the operation and preparation for the prospective company.

Bankers pointed out that in addition to payment and shopping, mobile phones will be capable of offering many more functions, including payment of parking fee and admission into performing venues.

According to the statistics of the Institute for Information Industry (III), there have been over 4 million smart phones in Taiwan and the share of smart phones will top 50% by 2015. At present, the rate of Taiwanese people using mobile phones for shopping reaches only 16%, which underscores large leeway for further growth of the business, since annual transaction value of Taiwan's e-commerce market exceeds NT$430 billion.

Mainland China's market survey company also reported that the scale of the mainland's mobile payment market exceeded 5 billion yuan in 2011, which will top 23.5 billion yuan in 2013, for an annual growth rate of exceeding 100%.

The five major telecom carriers and EasyCard Corp. have planned to jointly established Trusted Service Management (TSM) Company, which will forge a NFC (near field communication) platform offering mobile-payment service. They seek to cooperate with banks, in the fields of share holding, technology, and specifications.

Banks noted that TSM will serve mainly as an intermediary platform for mobile payment, offering a verification mechanism for credit cards and smart phones, such as the checking of the identity of credit-card and mobile-phone holders.

The five telecom carriers and EasyCard Corp. have invited Bankers' Association and 10 major credit-card issuing banks, such as Cathay United Bank, Chinatrust Bank, Bank SinoPac, and E.Sun Bank, to take part in the preparation for the prospective company.

Since the business and technological specifications of mobile payment are closely related to banks' credit-card business, banks strive to take part in the project and Bankers' Association has established a task force and suggested the FSC to allow banks to invest in the project.

An FSC official noted that according to the Banking Law, banks can invest in a non-financial firm holding up to 5% of stake. The regulator is supportive of such investments, so long as they comply with legal regulations. The official remarked that since mobile payment is related to credit card, it is still uncertain such investments belong to financial or non-financial field.