NXP’s Secure Mobile Transit to be in More Than 100 Chinese Cities by End of 2018

As a leading provider of mobile transit solutions based on Near Field Communication, NXP has played an important role in shaping China’s regional mobile transit ecosystem since 2015. The ultimate aim is to give anyone in China with an NFC-enabled smartphone the option to activate NFC-based mobile transit services. Until the end of 2018, NXP’s transit enablement plan aims to have support for NFC-based mobile transit in 104 Chinese cities.

Increasing support from China’s Public Transit Operators (PTOs) and Original Equipment Manufacturers (OEMs) means that more than 40% of all NFC-enabled phones in 104 Chinese cities can now activate mobile transit.

Activation on Smartphones and Wristbands
As the availability of mobile transit continues to spread, Chinese consumers are activating services in record numbers. The latest phone models, which include NFC functionality and offer support for mobile wallets, have attracted new users to mobile transit. Several of China’s leading systems for mobile payments, including Huawei Pay, Xiaomi Pay and OnePlus Pay now support NXP’s NFC-based wallets for mobile transit. Xiaomi has made a particularly big push for NFC in mass transit. According to the Chinese electronics company, their recent announcement of the Xiaomi Mi 8 smartphone saw historic activation rates for mobile transit wallets, reaching as high as 60% in Beijing and Shanghai in the first month of availability.

Activation of mobile transit wallets is also on the rise with the latest generation of wristbands. The new Xiaomi Mi Band 3, for example, is a premium fitness band with an enhanced OLED screen and NFC. It currently supports mobile transit in several major cities, including Beijing, Guangxi, Jiansu, Jilin, Shenzhen and Wuhan. Xiaomi is the largest wristband manufacturer in China, in part because of their ability to offer multiple functions at a competitive price. The comparatively inexpensive Mi Band 3 holds great potential to make NFC-based mobile transit even more mainstream.

Outpacing QR Codes in Mobile Transit
QR Codes are undeniably popular in China and form the basis of the two leading mobile payment applications, Alipay and Wechat. In mobile transit, QR codes are present in Beijing and Shanghai, where they are most widely used in single-journey tickets, as an alternative to paper tickets. For multi-journey tickets, however, NFC is becoming the preferred solution, according to Beijing Tong (BMAC). The market for multi-journey tickets is roughly five times the size of the single-journey market. In early 2018, Alipay and Wechat both ran strong campaigns to boost the use of QR Codes in mobile transit. The campaigns helped increase consumer awareness about mobile transit in general, which in turn helps give NFC mobile transit more visibility, too.

As NFC-based formats become more widespread, and people continue to have positive experiences, with greater convenience and faster transaction speeds, NFC is gaining noticeable ground over QR Codes in mobile transit. In Beijing, for instance, the Beijing Municipal Administration and Communication Card, more commonly known as the Yikatong, reported that, as of August 2018, their mobile transit service had a total of 3 million users and 2 million transactions per day, of which the clear majority were NFC-based transactions.

One reason for the recent transition from QR Codes to NFC for mass transit is the fact that Apple launched NFC transit in Beijing and Shanghai earlier this year. The simplicity and convenience of Apple’s user interface has helped drive the conversion to NFC.

Despite the fact that NFC attach rates are still lower than QR Code attach rates, the trend over the past few months indicates the NFC transactions could exceed QR Code transactions in China’s major cities. Targeted support from smartphone brands that offer NFC, including Huawei, Oppo and Xiaomi, will accelerate this trend even more.

NXP’s Three-Point Plan for Continued Expansion
To meet the goal of enabling every NFC-enabled device in China to use mobile transit, NXP is following a three-point plan that includes silicon innovation, ecosystem expansion and brand collaboration.

• Silicon innovation – NXP offers the SN100T, the world’s first monolithic solution that combines NFC and an embedded Secure Element (eSE). The SN100T delivers fast transaction speed in an ultra-small footprint, consumes very little power and offers the highest levels of hardware and security compliance. It’s the fast, secure way to deploy advanced NFC functionality and certified security on any platform – making it ideally suited for mobile transit.
• Ecosystem expansion – Unlike other approaches, which force mobile manufacturers to create a new integration and validation for each city, the NXP-driven approach lets mobile manufacturers do the integration just once, with a single backend infrastructure known as a transit hub. Mobile manufacturers need just one supplier for the entire solution. The Chinese company Snowball provides the wallet service, the transit applet in the eSE and the transit hub. The result is fast, cost-effective commercialization of easy-to-use mobile payment devices, with the ability to scale rapidly.
• Brand collaboration – NXP has partnered with some of China’s biggest and best-known brands in the mobile space, including Huawei and Xiaomi, to make mobile transit available to China’s tech-savvy consumers. Targeted promotions, designed to encourage activation of mobile transit services, have already seen positive results and will continue to highlight the simplicity, security and convenience of NFC-based services. For example, Xiaomi launched their latest Mi 8 phone model with special promotions around its mobile transit capabilities. For a limited time, users of the Shanghai traffic card could activate their transit card for free and Beijing-Tianjin-Hebei travelers could buy a discounted card. The plan led to record activation rates. Within 14 days, Xiaomi saw 50% activation for the Shanghai card and more than 60% activation for the Beijing-Tianjin-Hebei card on the Mi 8.

This targeted approach serves to increase passenger demand while continuing to raise awareness of mobile transit in general.

Making mass transit smarter, with support for mobile payments and digital analytics, is an important part of smart-city development. The increasing availability of NFC-enabled smartphones and wristbands in China is accelerating adoption of NFC-driven mass transit applications and, as a result, is making China’s mass transit more convenient to use, more efficient to operate and more sustainable to maintain.

NXP’s global transit leadership
Since 1994, NXP has worked with transit authorities around the globe to successfully design, deploy and manage automated fare collection systems using MIFARE® IC products. NXP builds on this experience and, as the owner of the MIFARE brand and the market leader in transport ticketing, is committed to help cities innovate today and tomorrow in public transportation. NXP’s MIFARE product portfolio supports paper and plastic transit tickets as well as mobile formats, with added support for multi-application features to create multi-vendor concepts.