Will Apple Pay Threaten The Status of AliPay in China?

Written by Joey Wang

According to recent news, Tim Cook showed his interest of cooperating with Jack Ma and his AliPay, saying that he is going to discuss a marriage between the two and find some areas of common space, which gained much attention. We still remember clearly Cook showed how Apple Pay matters on the October’s Apple launch and feel impressed with its super convenience and safety for payment. Therefore, here comes the problem: there is no doubt that Apple Pay is a powerful competitor to AliPay who accounts for the 70% of China’s online transactions. What if it is inviting the wolves into their own home for AliPay once the cooperation is conducted? Will Apple Pay threaten the status of AliPay in China? Obviously the answer is YES, from my perspective. Although for many consumers in China, they have already developed a habit of paying via AliPay, which has become an indispensable part of their daily life. It seems that Apple Pay could make a change.

Let us review the steps how to consume via AliPay first：open the App, unlock with your gesture, get a QR code and scanned by cashiers. It is a simple operation that you get to used it very much, however, what if payment could become simpler? Would you like to give it a shot? Absolutely Apple Pay works quicker, when you make a purchase, just wave your devices in front of the stores’ reader, use the touch ID of your fingerprint, and then watch your money disappear. As the purchasing power of Chinese consumers keep rising, it is undeniable that such convenience of Apple Pay could further stimulate consumption, and consumers may heavily rely on it in the future.

Though AliPay has owned 3 hundred million users in China, which is hard to be exceeded in terms of online consumption. However, as a influential manufacturer, Apple recently has also announced that will bring Apple University in order to seek its business position in China for the long-term, which showed its great attention towards China market. And based on large numbers of Apple fans in China, it is believed that Apple’s innovative payment concept will get attractive and popular so that the new customers are more willing to choose Apple products, and mature customers are more loyal because of its newly updated services with great convenience, which means that consumers who used to consume via Alipay installed in iPhone may turn to use Apple Pay directly. After all, time is money.

However, it is also a challenge for Apple Pay to push in China, as the openness of NFC is quite low and it could take a long time and huge cost to build awareness among users. On the other hand, the relevant policies from Chinese government may also set up some obstacles for Apple Pay. If there is no cooperation between AliPay and Apple Pay, at least it gives Jack Ma enough time to response for the coming threat. And once all the barriers broken, no matter whether Apple Pay and AliPay will collaborate or not, it is inevitable to have a drastic competition between the two at last. Then how will Apple Pay attack and how will AliPay defense? Who will win the market? Let’s wait and see.