Apple Pay, the tech giant’s electronic-payments service, has finally secured a place in the world’s biggest smartphone market.
The Cupertino, California-based company said Thursday that it sealed a deal with China UnionPay that will let Apple Pay users in China add credit or debit cards to the mobile-payments service. Apple said the service could launch as soon as early 2016 after testing and certification required by regulators.
“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,” Eddy Cue, Apple’s head of Internet software and services, said in a statement.
Terms of the partnership were not released.
Launched last year in the US and then in other countries, Apple Pay enables owners of the iPhone 6, iPhone 6S or Apple Watch to pay for items on the go via the wireless technology NFC (near-field communication). The service also allows payments to be made with just a fingerprint within apps on iPhone or iPad.
Companies are eager to push mobile payments in the belief that the additional service will build consumer loyalty. For instance, Apple Pay users could potentially be more likely to stick with an iPhone if they could store their payment data and use the device to buy shampoo, beer, gum or whatever else.
Apple’s effort to become the industry standard faces a growing number of competitors, including rival services such as Samsung Pay and Google’s Android Pay. And as the largest smartphone market in the world, China represents a significant business opportunity for mobile-payments systems.
The country’s massive population of 1.35 billion and growing middle class have created a lucrative market for companies like Apple, which has made significant progress in the country, expanding its retail stores and pushing iPhone sales in the country. China is a key market for Apple, accounting for $12.5 billion in revenue during its fourth quarter.
Apple had been trying to reach an agreement with Chinese bank UnionPay, which is the only bank in China that conducts interbank payments, according to a report in MarketWatch. That monopoly on credit- and debit-card processing effectively locks out MasterCard and Visa.
Since last year, Apple has also been chatting with at least eight major Chinese banks about adopting Apple Pay. But those talks hadn’t gone well either, a source close to them told MarketWatch. One bank expressed no interest in any deal.