Apple Pay set to Launch in China This Week


Apple Inc. will debut its electronic-payment system Apple Pay in mainland China on Thursday, according to a person familiar with the matter, its first such attempt to break into the Asian payment market.

The Cupertino, Calif., tech giant will partner with UnionPay, the overwhelmingly dominant payment network in China as well as 19 local banks.

In china, Apple will compete with two heavyweight competitors — Alibaba’s AliPay and WeChat’s wallet. AliPay is the dominating payment system for online payments, and WeChat’s wallet lets you pay for all sorts of things.

According to Dr Pinar Ozcan an Associate Professor at Warwick Business School, “Adoption of Apple Pay in China does depend largely on the alliances Apple builds, particularly with financial institutions. As always, a force to consider in China is Alibaba. The giant conglomerate with more than 400 million Chinese consumers so far invested largely on QR codes and more recently on selfie-payments. Rather than a battle between Apple and its competitors in NFC (Near Field Communication) payments, such as Google Wallet, it seems to me that the battle in China might be between Apple and local competitors like Alibaba and Tencent over the actual payment technology.”

Apple Pay, which was launched in 2014, allows users to pay for their purchases with its signature devices—iPhones, iPads and Apple Watches—which they can tap against scanners advertising Apple Pay or UnionPay’s QuickPass, a chip-based contactless payment service.

“In the US, Apple Pay’s fingerprint-identification system and the storage of consumers’ secure payment details on the phone itself rather than the cloud; give Apple Pay great advantages, at least in terms of security as perceived by consumers. It seems that this will be critical in China as well… Back in 2009, Apple’s iPhone entered China with a cross-subsidised deal with China Mobile, which helped it attract a high number of middle-class consumers. With the steady annual wage increase in China, Apple’s potential customers are continuing to increase” Ozcan said.

This clearly is good news for Apple Pay. Apart from USA, Apple Pay is so far operational in the U.K., Australia and Canada.

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