In cooperation with Nokia (NOK), Philips and Xiamen Yitongka Company, China Mobile (CHL) has formally initiated a commercial test on the Near Field Communication (NFC) mobile phone payment system in Xiamen.

Zheng Shaodong from Nokia's NFC Department says that this first NFC commercial test will last two to three months before NFC is promoted in larger Chinese cities.

China Mobile has also set up a research team to support the commercial use of NFC. It is predicted that NFC will be put into trial use in domestic subways and banks in two or three months.

Apart from China Mobile, China Unicom is also actively studying various non-touch payment technology including NFC.

NFC is based on contactless and Radio Frequency Identification (RFID) solutions, which consist of a tag and a reader. The reader, when activated, emits a short-range radio signal that powers up a microchip on the tag, and allows for reading a small amount of data that can be stored on the tag.