Apple Pay launches today in China, ready to take on local tech titans

Apple launched its mobile payments system Apple Pay in China this morning, leaping in to a heated battle between WeChat and Alibaba’s Alipay.

Apple CEO Tim Cook took to Weibo this morning to herald the rollout of the service, which will work in stores and on some websites. “Apple Pay launching in China today. Can’t wait for you to try it and see how incredibly easy it is to use!” he wrote in English and Chinese.

Promotional image from Apple shows Apple Pay in use at a store in China via a NFC-enabled terminal. Issued by UnionPay, these are common in stores across the country.

The Apple Pay rollout in China will be faster than in any other country. Whereas Apple has expanded slowly in the US and other markets by making partnerships with individual banks, in China the company has buddied up with UnionPay, the sole domestic bank card organization and interbank network in the country. That means Apple Pay works with most China-issued debit and credit cards, and will be accepted at any store or restaurant that has installed the new breed of NFC-enabled PIN input dongles issued by UnionPay.

A card from the Industrial and Commercial Bank of China shown this morning inside the Wallet app in iOS.

That gives Apple Pay a huge footprint from day one.

The heated battle between WeChat Pay and Alipay across China means that the services are offering discounts to shoppers.

In contrast, Apple’s new arch-rivals have expanded more slowly because they’re going against the monopolistic UnionPay. Tencent’s popular chat app WeChat and its baked-in mobile wallet and Alibaba spin-off app Alipay have had to get stores or chains to sign up to use their services and also install a barcode scanner into their cash registers. But after a head start of a couple of years, both WeChat Pay and Alibaba are now widely accepted at stores of all sizes across China, including major chains such as Uniqlo, FamilyMart, and Sam’s Club.

As my experiment last year showed, it’s pretty easy to go entirely cashless in China using a mix of WeChat and Alipay. That leaves little room for Apple, despite the apparent benefit of the UnionPay partnership.

The heated battle between WeChat Pay and Alipay across China means that the services are offering discounts at certain stores, with the Chinese tech titans picking up the tab so that their users can get the benefit of a price-cut with their cashless transaction.