Chinese smartphone and electronics manufacturer Xiaomi has launched its own payments service called Mi Pay. Xiaomi vice president Hugo Barra said that this was the company’s first major foray into financial services.

With this, Xiaomi has joined other technology companies – such as Apple, Google, Microsoft, and Samsung – which are looking to build out their own payments ecosystem. However, Mi Pay will only be available in China right now and has tied up with Bank of China and Union Pay, a card network in China. TechCrunch reports that Mi Pay can be used for paying for public transit services and will be NFC enabled. So far, the only NFC enabled device from Xiaomi is the Mi 5.

Mi Pay can hold up to eight cards per user and requires card number and verification. This card number will be tokenized similar to Apple Pay and Android Pay. Users need tap their phone on an NFC payment terminal, and the default credit or debit card is charged. The wallet sends a one-time transaction number and encrypted security code that won’t work for any other device, person, or purchase.

Focus on services

In June, Xiaomi signed a deal with Microsoft to preload Office and Skype on Xiaomi devices. The company is also acquiring 1500 Microsoft patents. Starting in September 2016, Xiaomi’s Android devices, including Mi 5, Mi Max, Mi 4s, Redmi Note 3 and Redmi 3, will have Microsoft Word, Excel, PowerPoint, Outlook and Skype applications pre-installed on them.

It’s worth noting that Xiaomi has a VoIP service of its own called Mi Voice, which incidentally had made an appearance on Indian handsets, in March 2016, though it still wasn’t working at the time.

In 2015, Xiaomi had a market share of 15% in China, as per data released by IDC. Apparently, in the month of April this year, Xiaomi’s market share went up to 26% in China. However, what it does illustrate is that the Chinese smartphone market is becoming increasingly saturated, with hardly any room to manoeuvre further and the company wants to focus on services to get an additional source of revenue.