Apple CEO Tim Cook announced that Apple Pay landed in China Thursday morning with a post on Sina Weibo. Payment partner banks, stores and apps are all fully prepared for its arrival.
Chinese users can add UnionPay credit cards and debit cards to the “Wallet” app, but it is not being made available to all at the same time. Instead, it will come in batches, reports Chinese tech media website iFanr.
“Apple Pay is open to a new bunch of users every hour,” said iFanr, “but if you change your district setting from China to America now you can successfully register your bank card in the Wallet without waiting.”
Banks are also ready. China Merchants Bank even launched a “registering Apple Pay for 99 Bonus Points” promotion to incentivize its users to register their bank cards for Apple Pay.
According to Apple’s official website, a bunch of online apps and offline stores are ready for users to use this payment method, including convenient stores 7-11, All Day and Circle K, fast food restaurants KFC, McDonalds and Burger King, group buying apps Meituan and Dianping, e-commerce platforms Jumei and VIP and travel booking apps Ctrip, Qunar and Air China.
But is Apple Pay poised to be a game-changer in 2016 for the payment method market in China? Many people doubt it.
From a user perspective, Apple Pay is only available for certain Apple device users. iPhone and iPad users will need iOS 9.2 or later, and Apple Watch users will need Watch OS 2.1 or later. Apple ranked as the number-two smartphone vendor in mainland China in Q4 2015 by making 17.1 million shipments, according to a recent IDC report. But iPhone 6 and above users are still a small portion of the huge smartphone user group.
There are also a limited number of NFC-technology-supported POS terminals in China. According to Sina Finance, only 25% of the smartphones in China have NFC capability, and there are only three million QuickPass POS terminals (which support NFC payment) among the 10 million UnionPay POS terminals.
Apple Pay’s biggest obstacle is its strong domestic Chinese rivals. Alipay, the payment method launched by Alibaba Group and WeChat payment take up nearly 90% of the third-party payment market, in which the former accounts for 71.55% as the unshakable market leader. Chinese users are spoiled by the two companies with large subsidies and bonuses, and they are also tricked to stick to their payment methods.
But it is still worth waiting to see how Apple Pay performs. It features a convenient and fast user experience. Users don’t need to open the app or even wake up the smartphone screen. This is in comparison to its rivals who use QR Code scanning technology.
The payment method market in China is huge. According to Analysys, the transaction volume of China’s third-party payment market in Q3 2015 soared to nearly RMB 4.4 trillion. And according to CNNIC, the number of users in China in the first half of 2015 who used smartphones, engaged in online shopping or made an online booking are 276 million, 270 million and 168 million respectively.
(Top photo from iFeng.com)