This week, Xiaomi Corp would become the first Chinese smartphone company to offer mobile payment service on its devices. The service would put the company on the same level as its close rivals Apple Inc and Samsung Electronics Co, who have launched a similar service.

Xiaomi Corp announced on its official Weibo account on Tuesday that it would start offering MI Pay service from  Thursday in partnership with China UnionPay, China Daily reported.

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The MI Pay service will leverage NFC technology that will allow consumers to pay bills by merely holding their smartphones near point-of-sale terminals.  The service can be easily connected to credit cards and debit cards from 10 banks, the company said in a statement.

Consumers can also double up the MI Pay service as a transportation card to take a ride on buses and subways. The transportation service is already ready for trial service in Shenzhen and Shanghai and other four cities, a Xiaomi employee told China Daily.

With MI Pay, Xiaomi is clearly looking to diversify its product range in a bid to shore up its revenue. The company has been under pressure due to its declining shipments amid mounting competition from rivals and the steadily slowing smartphone market.

Last month, Xiaomi's domestic rival Huawei Technologies announced the impending launch of a similar payment service. China's online payment market, which is still in its infancy, is currently dominated by Alibaba's Alipay and Tencent's WeChat Payment.

Analysts claim that it would not be easy for Xiaomi, Huawei, and other newly launched services to dislodge Alipay and WeChat.   

"NFC-enabled payment services are still quite new in China because local consumers have been using Alipay and Tenpay (mobile payment applications developed by Alibaba and Tencent) for a long time. it is quite difficult to change consumers' preferences and user habits," said Li Chao, an analyst at research firm iResearch Consulting Group.

TagsXiaomi, china, Online Payment Services in China, Mi Pay, Chinese smartphone news