Katie Marsal
After officials from both Apple and Alibaba publicly expressed interest in forging a possible mobile payment deal, Alibaba confirmed on Tuesday that it is currently in negotiations to bring Apple Pay to China.
A potential deal between Apple Pay and Alibaba's Alipay would focus exclusively on the Chinese market, where Alibaba is the dominant online retailer, vice chairman Joseph Tsai told The Wall Street Journal. He said that while the company is "positive" about the ongoing talks, details must still be worked out before an agreement can be reached.
While Alibaba is an online powerhouse, the company's Alipay has yet to take off in a meaningful way at retail in China. The system uses QR codes to be scanned, allowing users to complete transactions on their smartphone.
A partnership with Apple Pay could help both companies gain foothold in the market, as Apple has yet to debut its mobile payments service outside of the U.S.
Tsai suggested that an Apple Pay-Alipay deal could use Alibaba to provide back-end services for Apple Pay, and users would pay for transactions with money from their Alipay accounts.
Both Alibaba Chairman Jack Ma and Apple Chief Executive Tim Cook have expressed interest in working together. Tuesday's remarks reveal that those talks have progressed, and that both parties are still hopeful a deal can be reached.
A potential tie-up between Apple and Alibaba could face significant scrutiny from the Chinese government, however. Alipay has already seen its share of road blocks as it attempts to muscle its way into the mobile payment space.
The Chinese mobile payment market is currently dominated by UnionPay, a state-run operation that has NFC payment terminals across the country. Apple Pay in the iPhone 6 and iPhone 6 Plus is based on the same wireless technology, but adds Touch ID fingerprint sensing for added security.
William Gallagher
Mike Wuerthele
Malcolm Owen
Andrew O'Hara
26 Comments
Like I've said before, ApplePay will be accepted worldwide once all the arrangements are made, making certain American companies look really foolish. The MCX consortium is barking up the wrong tree and will ultimately fail. Whether people pay off their credit cards every month or not, they use it as a way to manage their money. Having a payment system that immediately takes money from your checking account is the same as using cash and doesn't fit many people's financial planning needs. I know MCX says they will/might allow credit cards to be used but the damage has already been done. MCX doesn't work for consumers.
[quote name="rob53" url="/t/183358/positive-talks-underway-for-apple-pay-partnership-with-alibabas-alipay-in-china#post_2637900"]Like I've said before, ApplePay will be accepted worldwide once all the arrangements are made, making certain American companies look really foolish. [B][I] The MCX consortium is [S]barking[/S] [COLOR=blue]banking[/COLOR] up the wrong tree [/I][/B ]and will ultimately fail. Whether people pay off their credit cards every month or not, they use it as a way to manage their money. Having a payment system that immediately takes money from your checking account is the same as using cash and doesn't fit many people's financial planning needs. I know MCX says they will/might allow credit cards to be used but the damage has already been done. MCX doesn't work for consumers. [/quote]
[quote name="rob53" url="/t/183358/positive-talks-underway-for-apple-pay-partnership-with-alibabas-alipay-in-china#post_2637900"]Like I've said before, ApplePay will be accepted worldwide once all the arrangements are made, making certain American companies look really foolish. The MCX consortium is barking up the wrong tree and will ultimately fail. Whether people pay off their credit cards every month or not, they use it as a way to manage their money. Having a payment system that immediately takes money from your checking account is the same as using cash and doesn't fit many people's financial planning needs. I know MCX says they will/might allow credit cards to be used but the damage has already been done. MCX doesn't work for consumers. [/quote] I agree, in addition the method at checkout with MCX system is slow, clunky and not as safe. Too futzy! One might as well write a check if you're gonna stand their that long. The train is already leaving the station and MCX is still deciding what to pack...
Perfect edit!!
Like I've said before, ApplePay will be accepted worldwide once all the arrangements are made, making certain American companies look really foolish. The MCX consortium is barking up the wrong tree and will ultimately fail. Whether people pay off their credit cards every month or not, they use it as a way to manage their money. Having a payment system that immediately takes money from your checking account is the same as using cash and doesn't fit many people's financial planning needs. I know MCX says they will/might allow credit cards to be used but the damage has already been done. MCX doesn't work for consumers.
I think a system that takes money directly out of ones checking account is a great solution for a lot of people, specially people with limited funds (low pay families / students) and for whom debt is a real problem. But as I understand it Apple Pay will also work with debit cards which essentially does the same.
For me the problem is if MCX enforces a one solution system whereby ApplePay is contractually excluded although even if this happens it will be a short term issue so I am not worried.
But the point is that it doesn't have to be ApplePay or bust. There is room for more than one system and if ApplePay is the best it will lead (and help Apple sell more devices). For non iPhone folks ApplePay is of little use.