Apple partners with UnionPay to bring Apple Pay to China

23 Dec 2015 | Author: | No comments yet »

Apple, Samsung team up with UnionPay to launch payment services in China.

San Francisco: Apple Inc and Samsung Electronics Co. reached separate agreements with China UnionPay Co. to introduce their competing mobile payments systems in the country next year. Customers of UnionPay, China’s largest payment and clearing network, will be able to add their bank cards to iPhones, iPads and the Apple Watch for purchases through Apple Pay, the companies said in a statement. Both Apple and Samsung’s mobile payment systems will work with China UnionPay’s QuickPass technology,which allows consumers to pay for purchases by simply waiving their near-field communications (NFC)-equipped mobile device in front of a QuickPass-enabled payment terminal. “With the rapid development of the mobile payment industry, China UnionPay is committed to open cooperation with parties in the industry to provide more secure and more convenient products and services for consumers,” said Chai Hongfeng, executive vice-president at the Shanghai-based company. While the deals allow the two biggest smartphone makers to take their nascent payments systems to the world’s largest market with the backing of state-backed UnionPay, they will face entrenched competition.

Apple Pay and Samsung Pay are both slated to be launched next year after the relevant tests and certification are conducted and processed, as required by Chinese regulators. “Having two global players, Samsung and Apple, competing for market share in the China mobile payment space will benefit UnionPay. Tenpay have already built large customer bases for payments on their e-commerce and other business platforms. “Alipay remains the industry’s dominant player, which Apple Pay would find difficult to surpass in the near future,” Di Jin, an analyst at Forrester Research, said in an email. “The partnership between Apple and UnionPay is a strategy of compromise that is unlikely to help Apple gain more users from their competition, despite UnionPay’s existing mobile payment alliances with banks and internet companies.” Still, for foreign companies such as Apple and Samsung, China offers an opportunity to profit from a market where mobile-payment transactions jumped 134 per cent to 22.6 trillion yuan ($3.5 trillion) last year, central bank data show. Gartner analyst Sandy Shen, however, said those two deals will likely see success in large mainland cities “where consumers are more receptive to new technologies and where there is a larger installed base of contactless point-of-sale terminals”.

That number pales in comparison with the country’s estimated 913 million 3G and 4G smartphone users by the end of this year, according to an industry study. Shen said China UnionPay and its domestic bank partners will need to rapidly increase the number of contactless mobile point-of-sale terminals across the country.

Apple Pay charges 0.15 per cent of the value of each purchase made through its system, out of the 2 per cent fee paid by merchants in US, Caixin magazine reported in February. Alipay allows its more than 400 million real-name registered users to make purchases from desktop computers, tablets and smartphones at more than 130,000 bricks-and-mortar merchants, according to its website.

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