Apple on Thursday announced it has reached an agreement with Chinese bankcard processor UnionPay to offer Apple Pay services in China early next year, opening the iOS-based mobile payments product to an increasingly important — and vast — Asian market.
According to Apple, China UnionPay cardholders will be able to add bank cards to Apple Pay on iPhone, Apple Watch and — for online purchases — iPad when the service goes live in early 2016. The Chinese bankcard network, which operates the nation's inter-bank clearing and settlement system, has issued 5 billion UnionPay Cards that can be used at more than 26 million merchants and 1.9 million ATMs.
"China UnionPay is dedicated to promoting payment innovations and providing secure, convenient mobile payment experiences for its hundreds of millions of cardholders, aligning multiple parties in the industry," said Chai Hongfeng, executive vice president of China UnionPay. "We're very excited to offer Apple Pay among a diverse set of innovative payment options that work with China UnionPay QuickPass."
UnionPay just this week debuted a version of its QuickPass touchless payments system that supports NFC-equipped smart devices. The system is backed by over 20 commercial banks and compatible with more than 10,000 point of sale terminals spread across mainland China.
Apple was rumored to have reached a preliminary agreement with UnionPay in November, but the companies were reportedly awaiting confirmation of support from card-issuing banks before announcing the partnership.
Apple Pay in China will work identically to existing iterations of the service currently available in the U.S., the UK, Canada and Australia. Apple's system relies on tokenization technology, which uses a unique Device Account Number stored in an onboard Secure Element to generate one-time dynamic security codes on a per-transaction basis.
"Apple Pay has revolutionized the way millions of people pay every day with their iPhone, Apple Watch and iPad," said Eddy Cue, Apple's SVP of Internet Software and Services. "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."
Apple expects the Chinese version of Apple Pay to launch in early 2016 after requiring the requisite certifications and regulatory hurdles. The service is in compliance with China's national mobile payment and financial industry standards, the company said.