Despite appearances earlier this week that Apple had lost out on bringing Apple Pay to China — with UnionPay’s announcement that it had selected British firm Powa to help it construct and launch its mobile payments platform — it seems appearances can be highly deceiving.
Apple Inc. and China’s state-run bank card giant are bringing Apple Pay to China together and hoping to catch Chinese consumers who are already a few steps ahead of the rest of the world when it comes to mPay usage.
Apple, China UnionPay Co. and 15 Chinese banks will all be part of the road production of Apple Pay, with a goal of having the mobile payment service on the ground (and in the ether) in China by the early part of 2016.
There are more than 304 million Chinese consumers who made online payments last year, according to the official China Internet Network Information Center, while more than 361 million shopped online and more than 282 million banked online. Alipay is far and away the market leader in this field, followed by Tencent, which embedded payments in its WeChat app. Apple’s main issue launching may be its reliance on NFC, which requires special infrastructure from merchants. Both Alipay and Tenpay are QR-based when used in physical stores.
UnionPay, the legally enshrined monopoly holder in processing bank card payments in China, has been busily making mobile friends of late. Last week UnionPay struck a deal with its South Korean neighbors at Samsung that will allow its cards to work with the South Korean company’s Samsung Pay smartphone card management system.
“No matter what kind of payment it is, as long as it complies with the laws and demands in the local marketplace, as well as fulfills consumers’ needs, we will all be welcoming,” said UnionPay President Shi Wenchao in an interview on the sidelines of China’s World Internet Conference. “UnionPay is not afraid of competition, which is a good chance for us to break past our old steps and level up our services.”
Still unclear is if Apple Pay will be making the same cut of interchange in China as it does in the U.S., where it racks up 15 basis points per card transaction and $0.05 per debit transaction.