China’s tech giants Xiaomi and Alibaba partner on smart wristband for wireless payments
China's largest domestic smartphone brand Xiaomi has entered into a partnership with Alibaba subsidiary Alipay to create wearable payment devices, Xiaomi announced this week.
The partnership aims to create wearable devices that are linked to the users' identity so that they can make wireless payments with the wristband as well as a variety of other implementations such as opening hotel room doors or buying cinema tickets.
Huami, the Chinese start-up which makes wristbands for Xiaomi, said the device could be connected to many web-based service and act as a user's identity card.
When partnered with a smartphone app, users will not have to enter their passwords to make Alipay payments when they're wearing the wristband.
Every time a payment is made, the Alipay app would identify the wristband to check whether it is approved. Payment data transmitted through Bluetooth would be encrypted to ensure security, the company said.
If the wristband is lost, it would not be able to be paired with another smartphone until the owner of the band deactivates it, so other people would not be able to make payments from your account with your smart band.
Though that means if you lose both your wristband and your smartphone, whoever has them can easily make payments since passwords will not be needed.
Alipay spokesman Jiang Long said in a statement that payment and other financial capabilities would add to the growing popularity of wearable devices.
The firm has made public their software development kit (SDK) - that allows the creation of applications - and application programming interfaces (APIs) – to build applications in the cloud computing market - so that developers could connect their wristband with other apps, he said.
The companies announced the partnership after more than six months of collaboration.
This is not the first move Xiaomi has made towards online payments or internet finance. Last month, Xiaomi announced a mobile wallet system that would pay users interest on the money transferred to it.
Apple Pay, which rolled out to iPhone users in the US in October, now accounts for two-thirds of all US mobile payments. Japanese messaging app Line also recently announced plans to expand its Line Pay service overseas.
In China, the most mature mobile payments market, providers processed more than 6 trillion yuan (US$960 billion) in 2014, five times the previous year's total, according to iResearch.
The market is currently dominated by Alipay, which powers Alibaba's e-commerce platforms Taobao and Tmall and recently announced a pay-with-a-selfie function. Alibaba is facing increasing competition however from Tencent, which last year launched a mobile payment service for its more than 438 million active users.