ApplePay has surpassed Great Wall of China.
As ApplePay partners up with China’s most of banks, its competition with Chinese businesses such as Alibaba, TenCent and others will now be inevitable.
According to IT industry and financial industry on the 1st, Apple’s mobile payment service called ApplePay will begin in all of China on the 8th. Practically NFC-based service will be possible in every regions of China as Apple was able to partner up with 19 Chinese banks.
By entering Chinese markets, it is expected that ApplePay will soon begin in South Korea as well. Also competition with Alibaba’s AliPay and TenCent’s WeChat that have preoccupied mobile payment markets already in securing markets’ shares will begin on full-scale.
Apple has succeeded in partnering up with most of Chinese banks so that it can begin its service in China.
Partnered banks are: Agricultural Bank of China, Bank of China, Bank of Guangzhou Co., Ltd., Bank of Shanghai Co., Ltd., Chinese Construction Bank Corporation, Everbright Bank, Guangfa Bank, Industrial Bank Co., Ltd., China Citic Bank, China Merchants Bank, China Minsheng Bank, Industrial & Commercial Bank of China, Ping An Bank Co., Ltd., Postal Savings Bank of China, and Fofa Bank. As 4 other banks have recently joined as partners, total of 19 banks will link their cards with ApplePay.
These banks practically have monopolistic positions in China, and this indicates that Apple pretty much has all of China’s infrastructures. To compete against AliPay and others, AliPay also has partnered up with many online payment businesses. Not only is it trying to secure NFC-based offline payment affiliated stores, but it is also trying to have online payment markets use ApplePay regularly.
It is already working on last stage of linking ApplePay’s payment settlement with online businesses such as Dianping, VIP.com, Yidao Taxi, China Air and others.
Cooperation with O2O-based businesses is also expected. To respond to current Chinese situations, Apple also putout a great benefit on commissions to businesses that work on app services that are for daily lives. It is trying to set up an ‘ApplePay Base Camp’ in all directions.
If many online payment settle businesses are linked to ApplePay, ApplePay can exercise significant amount of its influence onto leading businesses such as AliPay, TenPay and others that are monopolizing online markets.
Before launching ApplePay service, Apple is planning to produce demonstrative SNS video that shows how to make a payment settlement with ApplePay and distribute to all of China. On this video, which was exclusively obtained by Etnews, a scene of payments being made using a card from UnionPay, which is a monopolistic business in China, is scene. It is also planning to start its advertisements through online payment businesses with partnered banks.
A reason why ApplePay is able to launch its service in Chinese markets, which are known to be conservative, is due to a policy that reduces payments’ commissions greatly. Apple had faced difficulties with Chinese banks last year regarding commissions.
However as Apple has reduced commissions for payments made in China by fifth, it was able to partner up with Chinese banks. It is known that commission for payments between Apple and Chinese banks has been decided to be 0.03% while it is 0.15% in other countries.
As Apple Pay has decreased commission for payments in China, its final task is to conform problems regarding commission to China and reduce commission by actively negotiating with South Korean businesses.
Although Apple is remaining silent on entering South Korean markets, representatives for financial companies in South Korea are predicting that ApplePay will be able to launch its service as soon as possible as long as it solves two problems.
First of all, there is a difference in versions of terminals with NFC payments. When ApplePay’s payment is linked to South Korean payment terminals, there are instances when payments are not made due to problems with a version. It is heard that Visa Card and Apple are currently discussing to solve this problem. Second problem is regarding supplies of terminals.
For South Korea, which possesses terminals for IC payments, NFC payments are not mandatory. Because of this, most of terminals are based on MS and IC payments. Some people think that it might take longer for ApplePay to be launched in South Korea because Visa Card and others are planning to supply NFC-based payment terminals all at once according to Pyeongchang Winter Olympics.
Staff Reporter Gil, Jaeshik | firstname.lastname@example.org