Bank card association China UnionPay launched a smartphone application for mobile payments and financial services on Friday in Shanghai, a further effort to boost the emerging mobile payment market in the country, said market insiders.

The app, called simply Wallet, enables users to connect their phones with their bank card accounts, so they can simply swipe their phones against point of sales terminals. Users can also locate stores, hotels and other service providers and download vouchers.

Experts noted that mobile payments and mobile financial services have been widely promoted in China in the past two years, and with the rapid expansion of networks providing mobile payments and financial services, the sector may become a multi-billion-yuan market in the next few years.

"A mobile phone is far more than just a communication tool. For users, it is a payment tool and a mobile banking services tool. As for banks, they are mobile carriers of our services, and they are also expanding sales channels," said Jiang Mingsheng, executive vice-president of Shanghai Pudong Development Bank Co Ltd, which has been a pioneer in launching services on near-field communication smartphones.

With a bank card that has an embedded SIM card, an NFC phone can send signals for payments, which POS terminals can receive and complete transactions. In China, there are already 1.3 million NFC-enabled POS terminals in supermarkets, stores, subway stations and restaurants.

Eight banks have joined the NFC payment platform, including some of the country's largest such as Bank of China Ltd, Shanghai Pudong Development Bank and China CITIC Bank. More are expected to sign up to the service, which uses China UnionPay's trusted service management platform. The platform is fully integrated with that of China Mobile Ltd.

The increasing penetration of smartphones in China may also help boost the popularity of mobile payments.

GfK China, a market research service provider, said it estimates that some 160 million smartphones were sold in the first half in China, up 109 percent year-on-year. About 85 percent of all the mobile phones sold in the first half were smartphones, it said.

According to GfK, some 92 percent of all smartphones sold in the first half were priced between 600 yuan ($97) and 1,000 yuan.

The acceptance of NFC-enabled smartphones is essential to the transformation of telecommunication services, the report said.

According to GfK China, about 7 million smartphones with NFC functions were sold in the first quarter, up 551 percent.

Technology research firm Gartner forecasts worldwide mobile payment transaction volumes will reach $235.4 billion in 2013, up 44 percent year-on-year.