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Apple joins the fray of moneyless consumer buying
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THE debut of Apple Pay on the Chinese mainland last month created a “halo effect” across an industry chain that includes online and offline shoppers, Internet giants, smartphone vendors and payment services and device providers.
Apple Inc’s wireless payment service is a catalyst to boosting acceptance and technology upgrades and to providing consumers a safe, easy alternative to traditional cash transactions, analysts said.
Using “near field communication” technology and bank accounts tied to Apple IDs, the digital wallet can be used at terminals that support the technology. Users hold their Apple device to a point-of-sale machine and then press their fingertips to the phone’s touch ID sensor.
The service is available only on limited Apple devices, such as the iPhone 6 and Apple Watch, which constitutes a small fraction of the 1.3 billion mobile users in China. Still, Apple Pay enlisted 38 million users within the first 12 hours of its debut.
Nearly 20 Chinese banks support the new service and are eagerly promoting it through discounts and coupons. Apple Pay is reportedly not charging commission fees for its first two years of operation in China and charging only 0.07 percent in fees for the two years thereafter — half the rate it charges overseas partner banks.
Compared with bar code scanning payment methods offered by Alibaba and WeChat, Apple Pay offers consumers an easier and safer way to transact with fingerprint identification.
China is estimated to have 80 million to 100 million iPhone 6 users, a consumer class with considerable disposable income. No one wants to miss the huge market opportunities.
Besides banks, participating vendors include McDonald’s, KFC, Seven-Eleven, Pacific Coffee, Carrefour, Meituan-Dianping, Ctrip and Yidao. They are offering special discounts and promotions for Apple Pay users.
The list is growing.
Not to be upstaged, Android phone makers Samsung, Huawei, Xiaomi and ZTE announced that they have “near field communication” capable models already and will develop more this year. Samsung introduced its mobile payment service in China on Monday, in cooperation with China UnionPay.
Apple Pay is available on one-third of POS machines in China while the figure for Samsung Pay is 95 percent.
Xiaomi’s new flagship MI5, which debut in March, supports “near field communication.” Through cooperation with chip designer NXP, Xiaomi’s phones allow users to pay transportation fees and transfer data, starting in Shanghai and Shenzhen before expanding nationwide.
“We have Xiaomi Pay and it’s more powerful than Apple Pay,” said Lei Jun, Xiaomi’s CEO.
UnionPay has provided compatible point-of-sale terminals for users to complete the transactions.
ChinaPnR, a Shanghai-based payment services firm, has said that it would invest heavily to upgrade more point-of-sale machines with “near field communication” capability.
Shares in listed firms such as Shenzhen Sunway Communications Co, which are seen as surrogates for Apple Pay, surged recently. The companies make smartphone chips and point-of-sale machines with “near field communication” technology.
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