Apple to Launch its Online Payment System in China
Apple Inc. will be launching its payment services in China in 2016 pitting itself against rivals such as Alibaba Group Holdings and Tencent Holdings. Apple will be partnering with China’s main bank card and payment firm UnionPay, which is a State controlled consortium which has a monopoly on all yuan payments cards that is used in the country. UnionPay will also be tying up with Samsung Electronics payment system Samsung Pay.
Apple Pay will take on Alibaba’s Alipay and Tencent’s WeChat payment system which are the top and fast growing online payment market. Financial analysts see Apple Pay to take a bigger share in the market rather than Samsung Pay that was launched earlier this year. as Samsung Pay relies in Samsung selling devices and as of the moment Samsung is in retreat in the Chinese market and they don’t see Samsung Pay as major threat. The bigger challenge is against Alipay and WePay that have a stronger user base and is a main competitive threat to Apple.
Apple’s senior vice president of Internet software and services Eddy Cue, stated that the tie up with UnionPay and several leading local banks will help Apple Pay in giving Chinese shoppers a more convenient, secure and private payment system. China is a very important market for Apple since China is the second largest economy in the world and is one of Apple’s important markets for the iPhone and tablet sales but kept out of the online payment system market.
Online transactions is booming in china which is boosted by hundreds of millions of smartphones users that are using the phones for everything from paying for taxis, meals to buying goods in stores and supermarkets. This year China propsed regulations that will shake up online payment services, where firms that own their own payment systems can get huge profits when charging transactions fees.