Is Apple Pay Headed To China Next Year?

According to reports in The Wall Street Journal, Apple is ready to take its Apple Pay show even further out on the road in 2016, with plans to launch in China by the end of February.

According to sources familiar with the matter, Apple has made deals with China’s four largest state-run banks — partnerships that will reportedly allow users to link their Apple Pay accounts directly to their bank accounts.

Look out Alipay.

That is if it manages to happen, which it might not given the regulatory complexities in the Chinese market. Banking and eCommerce are overseen by multiple government agencies, which means it could be tricky for Apple to actually reach its goal of launch before China’s Spring Festival begins on Feb. 8.

Also still a mystery is how much those banks will be paying Apple for the privilege of the partnership. In the U.S., Apple gets 0.15 percent of all card transactions and $0.05 on every debit transaction. Chinese companies (like most non-U.S. companies) take a rather dim view of swipe fees, such that they are much lower than in the U.S. Negotiating those fees has been a major sticking point in Apple’s negotiations in China.

Apple has offered no official comment nor did any of its reported Chinese partners.

Should Apple make it into China, it faces steep challenges in the form of deeply entrenched mobile rivals. China UnionPay Co. holds a monopoly on credit and debit card payment processing, while electronic payments are dominated by Alipay, Alibaba Group’s payment platform, and WeChat, run by Tencent Holdings Ltd.

But Apple has a very enthusiastic market of iPhone users in China. Sales were up 99 percent in 2015.