The Apple Pay service has been officially launched in China in a move that could escalate the country’s smart phone payment race.
We think China could be our largest Apple Pay market
Customers of 19 Chinese banks will be able to link their accounts to the system which is encrypted with a user’s fingerprint. They include China’s biggest lender, Industrial and Commercial Bank of China. That means 80 percent of China’s credit and debit cards are eligible for Apple Pay
Apple’s local partner – China UnionPay – is installing the point-of-sale terminals in shops and food outlets.
The potential market is huge as nearly 360 million people used mobile payment services in China last year.
“We think China could be our largest Apple Pay market,” said Jennifer Bailey, vice president of Apple Pay.
Greater China is Apple’s second-largest market by revenue, and the world’s biggest smart phone market.
Chinese banks are looking beyond smart phones for payments.
“We are trying to work not only with mobile phone producers, but also the producers of wearable devices like smart bracelets and watches, so as to cater to the financial needs in certain conditions. Such services will expand to information providing and wealth management in the future,” said Guo Weimin, general manager of Bank of China’s Online Finance Department.
Several of the country’s internet firms already accept Apple Pay, alongside local versions.
However it may not be an easy path for Apple which will have to convince the hundreds of millions of users of the country’s entrenched, dominant services to switch.
“With 100 percent saturation of local payment systems, no one in China is clamoring for Apple Pay,” said one retailer who declined to be named for fear of harming business prospects.
He told Reuters: “Today, everyone has a local payment option on their phone, so Apple Pay is a solution in need of a problem.”
China is the fifth country to use the service, after the United States, Britain, Canada and Australia.