GlobalData Plc

Competition heating up in Chinese mobile payments space

In the two months since Apple Pay launched in China, Huawei and Samsung have followed suit with their own mobile wallets. Although Alipay still has an advantage, it will face strong competition from these global handset providers.

China boasts more than four times as many mobile phones as the US, meaning everyone involved in mobile payments wants a piece of the market. Huawei and Samsung are the latest to enter the fray, following on from the launch of Apple Pay in February 2016.

One thing the three new mobile payment platforms have in common is they are all NFC-based. Alipay’s QR system is best suited to the current infrastructure and utilizes technology most familiar to consumers. However, with competition escalating, it is entirely possible that the new players will help make NFC the industry standard for mobile payments in the country.

To launch in China, Apple, Huawei, and Samsung have all partnered with China UnionPay. The partnerships are win-win for all parties, enabling UnionPay to enter the mobile payment ecosystem and allowing the handset providers to create their own mobile payment platforms that will be supported by UnionPay’s standardized payment network.

The partnership will give the handset manufacturers scale with merchants and drive the adoption of NFC acceptance in the market. It is only a matter of time until this re-imagined market puts pressure on Alipay to also adapt to NFC and make it the new standard.

By Arnie Cho, Senior Consumer Payments Analyst

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