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Apple, Samsung team up with UnionPay to launch payment services in China early next year

China UnionPay has forged separate ties with both tech titans to accelerate the adoption of fast and secure contactless mobile payment systems across the country

PUBLISHED : Friday, 18 December, 2015, 10:44am
UPDATED : Friday, 18 December, 2015, 6:46pm

China UnionPay has forged separate ties with Apple and Samsung Electronics that could accelerate the adoption of fast and secure contactless mobile payment systems across the country, the world’s largest smartphone market.

These new partnerships will allow ChinaUnion Pay cardholders from early next year to easily add their bank cards to Apple Pay on the iPhone, Apple Watch or iPad, and to Samsung Pay on the Korean company’s Galaxy and Note devices.

Both Apple and Samsung’s mobile payment systems will work with China UnionPay’s QuickPass technology,which allows consumers to pay for purchases by simply waiving their near-field communications (NFC)-equipped mobile device in front of a QuickPass-enabled payment terminal.

Samsung has expanded the use of NFC chips in its Galaxy and Note devices, while Apple started adopting NFC with the release of its iPhone 6 last year.

“With the rapid development of the mobile payment industry, China UnionPay is committed to open cooperation with parties in the industry to provide more secure and more convenient products and services for consumers,” said Chai Hongfeng, executive vice-president at the Shanghai-based company.

READ MORE: Apple launching mobile payment, digital wallet service in Hong Kong and Singapore in 2016

Apple Pay and Samsung Pay are both slated to be launched next year after the relevant tests and certification are conducted and processed, as required by Chinese regulators.

Both systems are expected to comply with the applicable national mobile payment and financial industry standards in China.

“Having two global players, Samsung and Apple, competing for market share in the China mobile payment space will benefit UnionPay. These partnerships allow UnionPay to reach a wider consumer base,” Forrester Research analyst Jin Di said.

Gartner analyst Sandy Shen, however, said those two deals will likely see success in large mainland cities “where consumers are more receptive to new technologies and where there is a larger installed base of contactless point-of-sale terminals”.

China UnionPay currently operates more than five million contactless payment terminals that support NFC-enabled mobile devices.

That number pales in comparison with the country’s estimated 913 million 3G and 4G smartphone users by the end of this year, according to an industry study.

Shen said China UnionPay and its domestic bank partners will need to rapidly increase the number of contactless mobile point-of-sale terminals across the country.

Another big hurdle is changing user behaviour in a market where cash, credit and debit cards, as well as online payment services from Alibaba Group and Tencent Holdings, are widely used.

“After people use contactless mobile payment systems for the first time as a novelty, the challenge will be convincing people to use them on a regular basis,” Shen said.

A study by Deloitte had an optimistic view of the worldwide market. It predicted five per cent of the global base of 600 to 650 million NFC-equipped smartphones will be used at least once a month to make contactless in-store payments at retail outlets by the end of this year.