Xiaomi's Mi Pay is the latest entry in China's growing mobile payments market

Xaume Olleros | Bloomberg | Getty Images

Xiaomi on Thursday announced the launch of its mobile payment system in China, becoming the latest smartphone maker to tap into the growing market of contactless payments.

Mi Pay supports credit cards from 20 banks and debit cards from 12, including those from the Bank of China, Industrial and Commercial Bank of China, China Construction Bank, Bank of Communications and China Merchants Bank. Xiaomi said that up to eight cards could be tied to a single device.

"We believe that Mi Pay will be a key driving force in promoting the development of China's mobile payments industry, and deliver much more convenience to our users," Xiaomi founder and CEO, Lei Jun, said in a statement.

Mi Pay, which was jointly launched with the state-run payment processing network China UnionPay, would likely face competition from a variety of other mobile payments systems already operating in China.

Alibaba's Alipay, Tencent's WeChat Pay as well as Apple Pay and Samsung Pay are among mobile payment systems that have been introduced in recent months to tap consumers in the world's largest smartphone market.

Users will also able to add their public transportation cards to the Mi Wallet app, hence eliminating the need to carry around multiple cards.

Mi Pay makes use of near field communication (NFC) technology and Xiaomi said its NFC-enabled smartphones were tested to withstand various invasive and non-invasive attacks to provide data protection and encryption, and made use of multiple authentication mechanisms including fingerprint scanning.

In the event a device was lost or stolen, users could turn off their Mi Pay through the official website.

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