The People's Bank of China said it would launch pilot projects for mobile payment services in China's rural areas, according to a report in the China Securities Journal.
In order to use the services, rural residents have to apply for a credit card, along with a SIM card that will be linked to the account. The mobile services will be able to process taxes, remittances and withdrawing small amounts of cash.
Agricultural Bank of China, Postal Savings Bank of China, China UnionPay and three Chinese telecom operators are among the first batch of companies participating in the pilot projects, the paper added.
China UnionPay is conducting training programs for some agricultural product dealers, to promote mobile payment services in rural areas, sources told the paper.
Authorities are likely to establish an upper limit for the transactions, the sources said. For example, the amount for a single cash transfer will have to be less than 1,000 yuan, and each personal account will not be able to transfer more than 10,000 yuan in total within a year.
About half of China's mobile subscribers live in rural areas, which shows a big potential for developing mobile payment services there, analysts said. Banks are reluctant to open outlets in rural markets due to high costs and low returns. Therefore, conducting financial transactions via mobile phones may help meet rural residents' demands, the analysts added.
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