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Apple Pay gets ready for war in China

By NexChange
FinTech

Apple looks set to take on internet giants Alibaba and Tencent by launching its Apple Pay platform in China to compete with theirs.

The Wall Street Journal reports the mobile-payment service registered an entity in the Shanghai free-trade zone in June. Called Apple Technology Service (Shanghai), its operations will include technical consulting and services and system integration in payments.

It comes as no surprise. Apple CEO Tim Cook has said the company wants to launch payments as soon as possible. But the doesn't mean it won't have a heck of a fight on its hands.

Alibaba and Tencent have already been in the payments space for at two years. E-commerce giant Alibaba has AliPay, while Tencent has payments functionality  bundled into its WeChat platform. Like Apple Pay, both are based on near-field communication (NFC) technology.

Apple is not incapable of pulling a China incursion off. Apple's other products have taken China by storm, its most recent result showed revenue in  Greater China rose 112% in the fiscal third quarter ended June.

Also, iPhone sales in the region rose 87% versus 5% in the broader smartphone market. This is important as the Apply Pay service is restricted iPhone and Apple Watch owners.

Breaking China's  payment market will not be like breaking the smartphone market, and Apple can expect a lot more fightback from well-established domestic players and, potentially, local regulators.
Photo: Dan DeChiaro

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