Mobile Commerce

Apple Inching Closer To Apple Pay-Alipay Match?

Will Tim Cook’s recent visit to China be enough to push the envelope and bring Apple Pay to China? Cook’s comments to Chinese news agency, Xinhua, certainly suggest Apple is making more headway in the country.

And this time, it’s with Alibaba (again), according to multiple media reports on Cook’s visit, which suggested that Apple could be in talks with Alibaba to bring Apple Pay to China.

Still, Cook’s vagueness in his remarks show that Apple hasn’t quite secured a deal in the one country the company has been fighting to be a bigger part of when it comes to mobile payments. As Apple grows its market share in smartphone sales in the country, Apple has made it clear they want to have a bigger presence in the country. While Cook’s visit to China was to promote Apple’s environmental efforts to bring solar farms across the region, he also shared more about his thoughts on bringing Apple Pay to the region.

“We very much want to get Apple Pay in China,” Cook said during his visit. “I’m very bullish on Apple Pay in China.”

Apple recently added China’s UnionPay as a payment option on Apple’s products, such as paying for items from the iTunes store, but to make headway in the country itself, Apple is going to have to convince UnionPay and Chinese regulators that Apple Pay is a mobile payment option it should embrace.

“We have been looking to expand our ecosystem [in China]. …We increased the iPhone point-of-sales to over 40,000 during the quarter; that’s up about 9 percent, year on year. More importantly than the total number, we are in many more cities than we were before. We worked significantly on our online store, which our online store revenue was up over three times, year over year,” Cook said in the company’s second quarter earnings call.

Cook indicated then that he believes because of China’s mobile-friendly population — which embraces shopping with their phones more than any other region in the world — China would be the perfect spot for Apple Pay to take off. An Apple Pay-Alipay deal could be what helps that plan take off, but, based on reports, it’s too early to tell when that may happen.

While these new reports show hopeful signs that Apple is making progress with Alibaba to help bring the mobile payments app into the country, it doesn’t necessarily mean it will be anytime soon, even if the two do strike a deal. Reports have been surfacing since last November that Alibaba and Apple have been in ongoing talks, which have all been reported as “positive.”

As the sole entity in China allowed to handle interbank payments, UnionPay is the key hurdle for Apple to clear in order to get its mobile payments option into the hands of the mobile-focused consumer base in China. But negotiations between the two have lagged, which may be why Apple is looking to Alibaba to help bring it into the country.

Some reports have suggested that major Chinese banks have an issue with how high Apple’s fees are for Apple Pay transactions. Alibaba Executive Chairman Jack Ma said last October that the company is open to working with Apple as a way to partner on mobile payments, but he hasn’t offered any details of what that relationship would look like.

Recent correspondence from an Alibaba spokesperson to CNBC indicated that conversation may be moving forward.

“Ant Financial (the Alibaba affiliate behind Alipay) is open to work with various partners in order to provide secure, efficient and convenient online and mobile payment services for over 300 million Alipay users,” the unidentified spokesperson wrote via email.


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