‘Apple Pay’ to be launched in mainland China this week to dominate Asian payment market

According to Reuters, on Feb 18, the website for Chinese version of the Apple Pay an e-payment system could be launched in mainland China by Apple Inc., striving to break into the Asian payment market.

Reps for the Industrial and Commercial Bank of China have spread the word via social media that the mobile payments service will launch for its customers on February 18, according to official sources. A separate post from the WeChat account of China Guangfa Bank credit cards on the Sina Tech website said that Apple Pay will launch Thursday at 5:00 a.m. local time.

The website still lists the service as “coming soon,” but it does note the names of several supporting banks.

The Cupertino, Calif., tech giant strikes the deal with UnionPay, which holds a monopoly on bank-card payments in China, as well as with 19 Chinese banks.

Apple launched Apple Pay in the U.S. in 2014 and has expanded the service to the U.K., Australia and Canada.

Apple Pay allows users to pay for their purchases with its signature devices—iPhones, iPads and Apple Watches—which they can tap against scanners advertising Apple Pay or UnionPay’s QuickPass, a chip-based contactless payment service.

With its launch of Apple Pay in mainland China, Apple will be entering a market where electronic payments are already widely used. More than 358 million Chinese conduct their payment online via mobile devices, according to 2015 figures from the official China Internet Network Information Center, which said more than 416 million Chinese made payments online.

Apple Pay’s financial arrangements in China haven’t been disclosed. In the U.S., Apple gets 0.15% of all credit-card transactions through Apple Pay and 0.5 cent per debit transaction, according to people familiar with the matter.

The Chinese domestic market is already dominated by Alipay, an electronic-payment service affiliated with Alibaba Group Holding Ltd., as well as by Tencent Holdings Ltd., which has integrated payment systems into its popular WeChat instant-messaging mobile app.
Apple Pay uses what is called near-field communications technology that requires the user to be close to a scanner without relying on a telecom network, while the Chinese services allow users to buy goods, share lunch bills and transfer money over any telecom network.

UnionPay is connected to China’s State Council, or cabinet, and China’s central bank. Its grip over payments has sparked a long-running trade dispute. China has said it would open the market to players like Visa Inc. and MasterCard Inc.