Apple Pay is poised to go live in China this week, that is, in the face of stiff competition. Apple's mobile payment system is getting into a market governed by Tencent's WeChat Payment and Ant Financial's Alipay.
Beginning on Thursday, Apple Pay will be available in China for customers of Industrial and Commercial Bank of China (ICBC), the country's largest lender by assets. The news was revealed by bank representatives via social media posts, according to Reuters. Apple, however, refused to provide comments concerning the bank's announcement.
Aside from ICBC, 19 other Chinese lenders will also serve as official partners of Apple Pay, according to Apple China's website. Moreover, local media said two other lenders will be joining ICBC on Thursday. A state radio station in China reported on its website that China Construction Bank Corp. and China Guangfa Bank Co Ltd. will also start offering Apple's mobile payment service on that day.
The move makes China, which is the biggest smartphone market in the world, the fifth country to have Apple Pay.
Reuters believes that among the biggest troubles of Apple in China will be "how to compete with dominant and entrenched players, serving shoppers well used to paying for goods and services with their handsets." Apple's move is seen as the company's attempt to take on WeChat Payment, which is operated by Tencent, and Alipay, which is run by Ant Financial.
WeChat Payment today is increasingly gaining traction in China since its introduction of its digital red envelope functionality. Tencent processed 32.1 billion red envelopers via its WeChat Payment platform for the Chinese Lunar New Year. The company said these were sent by 516 million users in the country.
Alipay, in the meantime, also continues to expand in the country. During the Spring Gala this year, 400 million users handed out 800 million yuan ($122 million) worth of digital red envelopes.
China has seen the digital red envelope feature grow by 903 percent since last year's Chinese New Year. While senders appear to be giving up the tradition of sending money in literal red envelopes for speed and convenience, the idea itself of red envelopes may have just led users to think they're sticking to tradition, that is, virtually.
With a single feature on China's two biggest mobile payment services currently gaining popularity, Apple Pay will need to cook something up to redirect the users' attention.
