- Clients of 19 Chinese lenders can shop with Apple Pay
- Alipay and Tencent dominate China's online payment market
Apple Inc. introduced its mobile payments system to China through a partnership with China UnionPay Co. as the iPhone maker teams with the country’s largest clearing network to spur usage.
Customers of 19 lenders, including Industrial & Commercial Bank of China Ltd. and Agricultural Bank of China Ltd., will be able to use Apple Pay through UnionPay’s point-of-sales network across the country, UnionPay said Thursday in a statement. Users can sign up by adding their bank card information into the Wallet application on Apple devices, the Shanghai-based company said.
Joining up with Apple Pay is another move by UnionPay to win back market share in mobile payment from Internet rivals such as Alibaba Group Holding Ltd.’s Alipay affiliate after sealing a similar deal with Samsung Electronics Co. in December. Alipay and Tencent Holdings Ltd.’s Tenpay together controlled 68 percent of China’s online payment market in the third-quarter of last year, according to market-research firm iResearch. UnionPay had 11 percent of the market.
“For Apple Pay, given that it’s unable to get a payment license on its own under Chinese policies, the best way to penetrate China’s payment market is through cooperation with UnionPay,” Luo Yi, a Shenzhen-based analyst at Huatai Securities Co., wrote in a note Thursday. “For UnionPay, its dominance in off-line payment market is gradually losing its appeal, therefore tieup with Apple Pay can help it upgrade its technology and fight back.”
China is an increasingly critical component of Apple’s business, helping it sell a record 13 million iPhones during the September debut-weekend of its latest handsets. In the September quarter, Cupertino, California-based Apple doubled its revenue to $12.5 billion in Greater China, a region that includes Hong Kong and Taiwan.
Tapping on UnionPay’s Quickpass, a form of so-called near-field communication technology, Apple Pay users will be able to make purchases with pre-stored bank card information on their device.
Other lenders to participate with Apple and UnionPay include China Construction Bank Corp. and Bank of China Ltd.