The National Development and Reform Commission recently approved the 2006 E-Commerce Fund covering 24 key national projects, including two e-payment platforms - Union Mobile Pay and Tencent's Tenpay.

Sources expect e-payment licenses to be officially issued in the second quarter of 2007. An online payment research report made by iResearch, an online market research supplier, said e-payment will flourish this year, with a market value to reach 100 billion yuan (US$13.01 billion) by 2008, and 280 billion yuan by 2010, with a compound annual growth rate of more than 60 percent.

However, e-payment growth in China is still slow to catch on due to safety and trust issues. A report by the China Financial Certification Authority said that 60 percent of Web surfers would not make deals via online banking for security concerns.

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"China's e-payment is technologically matured," said Xu Aigu, chief supervisor of risk control for Tenpay from Tencent, adding that customers' security awareness and proper operating habits can help curb online payment crimes.

Insiders said it is easy for firms to build websites; however, a professional e-payment solution has been a barrier. Statistics show small- and mid-sized enterprises account for 99.8 percent of domestic firms, but less than three percent realized e-commerce.

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