Both tech giants are racing to get mobile payments up and running before the Chinese New Year. Apple Pay and Samsung Pay, the competing mobile-payments services, was announced to enter the biggest smartphone marked as soon as possible.
Two competing companies unveiled yesterday that they’d already signed deals with the China UnionPay bank that will enable their customers in China to add credit or debit cards to the mobile-payments services. Both Apple and Samsung promised to launch their payment services in early 2016 after the testing and certification required by regulators.
“China is an extremely important market for Apple, and with China UnionPay and support from 15 of China’s leading banks, users will soon have a convenient, private and secure payment experience,” Eddy Cue, Apple’s head of Internet software and services, told reporters.
A few hours later, the Korean device maker spoke about a similar partnership with China UnionPay.
“The collaboration with China UnionPay, coupled with the support from major UnionPay partner banks in China, will bring this secure and easy-to-use mobile payment solution to more Samsung mobile users,” Injong Rhee, the global chief of Samsung Pay, said in a statement.
Atlantic Equities analyst James Cordwell predicts that Apple Pay will take a larger share of the market than Samsung’s similar service.
“I think Samsung Pay depends on Samsung selling devices and I think if anything, Samsung is in retreat in that (Chinese)market. So, I don’t see Samsung Pay as a major threat,” Cordwell said. “The bigger challenge is against Alipay or WePay, which are more platform agnostic and have a strong user base. I see that as the main competitive threat to Apple,” he suggested.
Apple Pay was launched a year ago in the U.S. It was created to simplify iPhone 6, iPhone 6S or Apple Watch’s owners the process of paying for items on the go via the wireless technology NFC. Meanwhile, Samsung Pay, which was introduced to the public this September, doesn’t require NFC technology and can work with any magnetic-strip card reader.
Both tech giants intend to promote mobile payments as they expect it will boost consumer loyalty. Users of mobile-payments services might be more likely to stick with their current smartphone if they can store their payment data and use the device to buy shampoo, beer or whatever their hearts desire.
“As the largest smartphone market in the world, China represents a significant business opportunity for mobile-payments systems. The country’s massive population of 1.35 billion and its growing middle class have created a lucrative market for companies like Apple and Samsung. For Apple, China is a key market, accounting for $12.5 billion in revenue during its fourth quarter,” Cnet writes.
Today China is considered to be the world’s second-largest economy and that’s why it is one of Apple’s most important markets for iPhone and tablet sales, but until now the firm has been kept out of its online payments market.
Online transactions are booming in China, boosted by the proliferation of hundreds of millions of smartphones that are being used for everything from paying for taxis and meals to buying goods at High Street stores.