Apple launched its mobile payment service in China today, after announcing it yesterday on its official website. The process started back in December of 2015 when Apple announced its partnership with Union Pay, and now it already has 19 of China’s biggest lenders as partners – which mean 80% of credit and debit cards in China are compatible with Apple Pay.
According to a VP of Apple Pay Jennifer Bailey interview with Reuters, “China could be our largest Apple Pay market”. China indeed has a huge market for mobile payment services, but how does Apple intend to beat its well established competition in China?
Alipay and WeChat wallet have been in China for a while and dominate the market completely. Alipay first launched its services back in 2003 and is now reported to have over 400 million active users, with 80% on mobile. WeChat Wallet started in September of 2014, and since it has a great interaction with its messaging app (among other features), it became popular fast.
No matter how popular these services are, it took a while until Chinese netizens began to trust them. Although Apple is a well known brand, why should or why would users switch to Apple Pay? They can already use WeChat or Alipay to pay for taxis, share bills in restaurants, transfer money to friends, pay for bookings, water and electricity bills, etc. The only reason anyone would choose Apple’s service is if it’s better, easier and more secure, which at the moment is a huge maybe.
China has more than 1 billion smartphone users but most of it are still Android system. Apple Pay only supports iOs and this just adds another hurdle to Apple’s goal of capturing the Chinese market away from competitors.
Time to wait and see how this pans out. Get your popcorn ready.