HANDPAY, a Shanghai-based third-party electronic payment service provider, has launched mobile phone payment services in the city.

Based on the service bundled with bank accounts, users can buy air tickets, pay utility bills and check bank accounts on their handsets. Users can also receive electronic coupons.

The company is to provide users with a memory card with the payment system, which ensures hardware-level security.

Concern over fraud and computer viruses is the major bottleneck for electronic payment services in China, especially in online payment sector, according to industry insiders.

More than 57.9 percent of users in China have had bad experiences of third party e-payment, which means that service providers need to simplify the conducting process and improve security, according to Analysys.

People can apply for Handpay's services with ID and bank cards at nine D.Phone outlets in the city, including one in the Xujiahui area.