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While China is Apple’s most important market outside of the US, the mobile payment service faces fierce competition from Alibaba and Tencent
An agreement between Apple and China’s Big Four state-owned banks has reportedly paved the way for the Silicon Valley tech giant to bring its Apple Pay service to the world’s most populous country this coming February, reports the Wall Street Journal.
Citing sources familiar with the situation, the Journal said the deal still faces regulatory hurdles because banking and e-commerce fall under the jurisdiction of multiple government departments.
But, the deal between Apple and the Big Four — Bank of China, China Construction Bank, Industrial and Commercial Bank of China and Agricultural Bank of China — will allow Chinese users to link Apple Pay with their local bank accounts.
One issue brought up in the report is how much Apple Pay will charge because the current pricing structure of 0.15 per cent of all credit card transactions and 0.5 cents per debit transaction was a point of contention, said the Wall Street Journal quoting people familiar with the discussions.
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Mobile payment services are a growing, and important, part of the tech scene throughout Asia and this move puts Apple in direct competition with Tencent‘s WeChat and Alibaba‘s AliPay.
For some context, during this year’s Singles Day, Alibaba claims, at its peak, that AliPay was processing 85,900 transactions per second for a total of 710 million transactions by the end of the day. These are numbers that illuminate both the size of the market and the capacity of the competition.
But China is an obvious target market for Apple Pay — iPhones are wildly popular there and, in April, sales briefly surpassed those in the United States as the top global market.
Q4 sales numbers in Greater China (including Taiwan and Hong Kong) were $US12.5 billion, a 99 per cent increase year-on-year.
As for Apple Pay in the United States, the jury is still out, but while it has yet to revolutionize mobile payment services, there remain enough positive signs to remain optimistic.
For example, Starbucks is planning to integrate the system in 2016 and an Accenture report from late October said Apple has a 68 per cent market share on mobile payments.
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Apple Pay has already expanded to Australia, Canada and the UK. It is also set to land in Singapore and Hong Kong in 2016.
Image Credit: Denys Prykhodov /Shutterstock
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