A passenger uses mobile payment on a bus in Hangzhou, Zhejiang Province. [Photo/Xinhua]

By year's end, mobile payment will be accepted on all public buses in Hangzhou, making the city the first in China to do so on all its buses and consolidating its reputation as a mobile application pioneer.

Hangzhou Public Transportation Group, the city's main public transportation service provider, announced on Tuesday that it will have mobile payment terminals in its 5,000 downtown buses by the end of June and in the remaining 3,000 buses in outlying districts by the end of December.

"Mobile payment is accepted and used by Hangzhou's residents in their daily life in areas like shopping, eating, taking a taxi－all except for taking a bus," said Weng Jun, deputy general manager of the group.

Almost 3.9 million passenger trips are made on public buses daily in Hangzhou, capital of Zhejiang Province, and cash accounts for 48 percent of total fare income, about 1.7 million yuan ($247,000) a day.

The company launched a trial run of the mobile payment system on its No 506 route on Aug. 1.

"Only a dozen passengers, mainly young people, used the mobile payment every day at first. Gradually, the number grew to 200," Weng said.

The trial run was extended to more lines and buses. "More than 800 buses on 30 lines have had terminals installed. The results met our expectations, pushing us to formally launch the move on all buses."

The terminals were developed by the bus group and Alipay, the payment tool of Alibaba affiliate Ant Financial. Alibaba is based in Hangzhou.

"Passengers can use Alipay and UnionPay flash payment cards on this terminal. ApplePay, SamsungPay, HuaweiPay, MiPay and AndroidPay can be used with smartphones or wearables like watches and electronic bracelets," said Liu Xiaojie, general manager of public services at Ant Financial.

Traditional cash payments and city transport cards will be kept to meet the needs of those who might be unfamiliar with mobile payment, like older riders.

UnionPay provides several security policies and measures to secure payments and accounts, the company said.

"Passengers put the UnionPay card on the terminal, and the machine can read the card automatically without signature and password. Security is the main concern," said Fan Hang, deputy general manager in Zhejiang for UnionPay.

"In addition to some regular tech support, we provide a 72 hour compensation service" if there is unauthorized use, Fan added.

The change is not just about a payment revolution, Weng said, since "it can help us to improve our service".

Alipay has also started test runs in several cities with the local public transportation authorities, such as Wuhan, capital of Hubei Province.