Chinese ecommerce giants Alibaba Group Holding and Tencent Holding will soon have foreign competition in offering electronic payment services in China. Apple said on Thursday that it would launch in 2016 its payment service in the Asian giant.
Ahead of the roll out, the Cupertino-based tech firm will enter into a partnership with UnionPay, a payment company owned by the government and the leading bank card in China, reports Reuters. UnionPay enjoys a monopoly on all yuan payment cards in the country.
The objective of the tie-up, according to Eddy Cue, senior vice president of Internet software and services of Apple, is to ensure that Chinese consumers have a "convenient, private and secure payment" choice. The current options for Chinese shoppers are WeChat Payment of Tencent and Alipay of Alibaba.
Cue acknowledges the importance of the Chinese market for Apple, especially sale of its iPhones and tablets, although this is the first time that Apple Pay would land in China.
Many Chinese now use their smartphones to pay for their purchasing for products, such as clothes, and services, such as taxi. China is considering passing legislation that would allow payment companies to charge transaction fees as part of a proposal in July to revamp the online payment services sector.
However, UnionPay is not limiting its tie-up with Apple Pay. The bank, which has 260 million customers, said on Friday that it is also planning to partner with Samsung Pay, owned by Apple competitor, the Seoul-based Samsung Electronics.
Apple Pay too is not closing doors to partnerships with rivals. In 2014, Apple CEO Tim Cook met with Alibaba founder and Chairman Jack Ma to talk about a possible integration with Alipay, TechCrunch reports.