With 4G service subscribers accounting for 13% of Taiwan's overall telecom service users and the number of smartphone users in the country surpassing 13.5 million in 2014, Taiwan's environment is already mature enough to develop a payment system using near-field communication (NFC) technology on smartphones. To promote tourism, the Taiwan government has accelerated a reviewof related regulations, and business opportunities from Taiwan's mobile payment services are expected to start popping up in 2015.
However, security, mobile terminal support, the government's role in the system and integration with other mobile payment services are expected to be major challenges for Taiwan in the development of a smartphone-based payment system.
In Taiwan, electronic payment using pre-paid cards is widely accepted in public transport in some metropolitan areas. People in Taiwan are rather familiar with mobile payment services.
Expecting enormous business opportunities, Taiwan's NFC mobile payment platform is expected to be led by financial institutions, telecom carriers and third-party players.
The financial institutions include Taiwan's three major financial settlement centers and 32 banks. Their payment service provider trusted service management (PSP TSM) platform will be a distinct advantage in providing services from the financial industry.
The telecom carriers will together establish a mobile network operator trusted service management (MNO TSM) platform and work on developing an one-stop integrated value-added service business model in the future.
As for third-party players that come from different industries, academia and the overseas markets, they established Smart Catch International in 2014 and will focus on developing host card emulation (HCE) solutions.
Digitimes Research believes that the high penetration of smartphones, the people's understanding of the payment system and strong demand will provide incentives and advantages for Taiwan's development of mobile payment systems, but weak integration between existing systems and people's concerns over the security of transactions on smartphones will be key issues that related companies need to address.