Apple, Samsung join China’s UnionPay
Apple Pay and Samsung Pay, the tech giants’ competing electronic-payments services, will go head to head next year in the world’s biggest smartphone market.
Apple and Samsung said Thursday they had secured separate deals with China UnionPay that will let their users in China add credit or debit cards to the respective mobile-payments services. Both companies said their services would launch in China as soon as early 2016 after testing and certification required by regulators.
“China is an extremely important market for Apple, and with China UnionPay and support from 15 of China’s leading banks, users will soon have a convenient, private and secure payment experience,” Eddy Cue, Apple’s head of Internet software and services, said in a statement. A few hours later, Samsung announced a similar partnership with China UnionPay.
China UnionPay cardholders will be able to link their bank cards to Apple and Samsung Pay and make payments without cash or cards, Xinhua cited a joint statement from the companies as saying. It said Apple and Samsung Pay will be made available to China UnionPay cardholders in early 2016 after certification by Chinese regulators.
“The collaboration with China UnionPay, coupled with the support from major UnionPay partner banks in China, will bring this secure and easy-to-use mobile payment solution to more Samsung mobile users,” Injong Rhee, the global chief of Samsung Pay, said in a statement.Terms of the deals were not released.
China UnionPay, which has issued more than five billion bank cards home and abroad, launched its own digital wallet for phones jointly with over 20 commercial banks last Saturday.
“China UnionPay is dedicated to promoting payment innovations and providing secure, convenient payment experiences for its hundreds of millions of cardholders, aligning multiple parties in the industry,” said Chai Hongfeng, executive vice president of China UnionPay.
Launched last year in the US and then in other countries, Apple Pay enables owners of the iPhone 6, iPhone 6S or Apple watch to pay for items on the go via the wireless technology NFC (near-field communication). Meanwhile, Samsung Pay, which hit the US this past september, doesn’t require NFC technology needed by Apple Pay and can work with any magnetic-strip card reader.
Companies are eager to push mobile payments in the belief that the additional service will build consumer loyalty. Users of electronic-payments services might be more likely to stick with their current smartphone if they could store their payment data and use the device to buy shampoo, beer, gum or whatever else.
As the largest smartphone market in the world, China represents a significant business opportunity for mobile-payments systems. The country’s massive population of 1.35 billion and growing middle class have created a lucrative market for companies like Apple and Samsung. For Apple, China is a key market, accounting for $12.5 billion in revenue during its fourth quarter.
Apple had been trying to reach an agreement with Chinese bank UnionPay , which is the only bank in China that conducts interbank payments, according to a report in MarketWatch. That monopoly on credit- and debit-card processing effectively locks out MasterCard and Visa.