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Apple Pay’s Chinese March Hits a Snag

February 20, 2024         By: Steven Anderson

It’s not surprising that “get in the Chinese market” is a top priority for a great many businesses out there.

With a huge number of potential customers, many of which are seeing personal fortunes on the rise in recent years, being able to offer up the latest in just about anything to this market eager to buy is likely to bring with it success for the company bringing the goods in question.

But one deal seems to be on the rocks, as reports suggest that the irresistible force of Apple Pay has just encountered the immovable object known as China.

Reports suggest that, within the last couple of days, negotiations between the Chinese and Apple Pay have largely halted over concerns that Apple Pay might be too popular for its own good. Reports further suggest that Apple Pay might well ultimately replace UnionPay, which has a monopoly within China as far as near field communications (NFC) payments go.

Meanwhile, Alipay runs the mobile payment system that focuses on Quick Response (QR) codes, which are still quite popular within China.

There’s also some word that suggests one of the biggest problems here is that the Chinese government wants a couple things from Apple first: one, the establishment of a new data center in China, so that Chinese data stays largely in China, and two, a possible reduction in transaction fees for Chinese purchases. Word from representatives of the People’s Bank of China, meanwhile, suggest that Apple is already at work on putting together a solution that’s amenable to both Apple and the Chinese.

It wasn’t too much of a surprise to see Apple having trouble getting into the Chinese markets with its mobile payment system. After all, there’s quite a bit of mobile payment action already in progress in the country, and plenty of entrenched interests likely not wanting a whole lot of nasty old competition showing up and wrecking the party.

But by like token, this was the kind of resistance that could only be taken so far. After all, in China, many are regarding having an Apple device as a new kind of status symbol, and with so many Chinese convinced that having an Apple on hand shows that you’ve really “made it big,” so to speak, keeping the mobile payment system that operates on such devices unavailable is the kind of thing that would likely get a lot of Chinese upset, and upset in the direction of the government.

The key takeaway here is that people have Apple devices, and want to use these Apple devices to the fullest, so that was going to pretty much require some relenting to let Apple Pay into the country.

If this was just a delaying tactic for negotiations’ sake, that may work out. A new data center, some reductions in costs, and Apple Pay gets in, most everyone’s happy; China gets new goodies, the Chinese people can put their assorted i-devices to work, and vendors in the region get more interested buyers ready to use an iPhone to pay.

Only time will tell just how this all works out, but it’s looking like Apple Pay will be landing in China soon, and that may kick off some incredible growth to follow.