China has seen a triple digit rise in payments by mobile phones, according to an e-commerce report.

The 2014 China Internet Financial Development Report said Chinese mobile payments jumped 707 percent year on year in 2013.

The number of Chinese making payments by mobile phones increased 126 percent year on year to 125 million in 2013, the report added.

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However, as mobile payments attract more and more users, an official of the Internet Society of China (ISC) warned of the risks involved in online transactions.

ISC Deputy Secretary-General Shi Xiansheng said bugs in mobile phones could compromise the security of online payments.

Shi said that in order to prevent identity theft and other problems arising from online payments technology and safety standards should be improved.

China's mobile payments industry is worth trillions of dollars, according to the website Quartz.

In 2013, Chinese made more than 1.6 billion financial transactions through their mobile phones, which translates into a total turnover of US$1.6 trillion, the report said.

However, as the industry continued to grow, China's central bank announced in March that it planned to put a ceiling on the amount of money that mobile phone users can spend through their smartphones.

Quartz said the People's Bank of China was also considering imposing similar restrictions on mobile financial products such as Yu'e Bao.

Yu'e Bao is an online investment fund available on smartphones. It is linked to Alipay, the Chinese version of PayPal and owned by e-commerce giant Alibaba.

Also in March, China banned the use of QR codes and virtual credit cards for online shopping.

Some industry executives said Chinese regulators wanted to crack down on companies offering mobile payment products because they compete against state-owned banks.

But the regulators defended the restrictions, saying their aim was to protect consumer information.

The central bank governor Zhou Xiaochuan denied there was a crackdown but suggested that regulations should be more detailed and specific.

Tagschina mobile phone payments, china e-commerce, china central bank, China Banks, Yu'e Bao, Zhou Xiaochuan