Researcher: Apple Pay’s success in China depends on the alliances Apple builds

With Apple Pay launching in China on Feb 18, its success depends largely on the alliances Apple builds, particularly with financial institutions, Dr. Pinar Ozcan of the UK’s Warwick Business School, told Apple Daily Report.

“As always, a force to consider in China is Alibaba. The giant conglomerate with more than 400 million Chinese consumers so far invested largely on QR codes and more recently on selfie-payments,” says theassociate professor of Strategic Management and a research of Apple Pay and mobile payment. “Rather than a battle between Apple and its competitors in NFC (Near Field Communication) payments, such as Google Wallet, it seems to me that the battle in China might be between Apple and local competitors like Alibaba and Tencent over the actual payment technology.”

In the US, Apple Pay’s fingerprint-identification system and the storage of consumers’ secure payment details on the phone itself rather than the cloud, give Apple Pay great advantages, at least in terms of security as perceived by consumers. It seems that this will be critical in China as well. 

"According to a recent survey by Deloitte, around 70% of Chinese expressed willingness to use mobile payments. However, this and other surveys also reveal that a large proportion of Chinese consumers have concerns about the security of mobile payment services.,” Ozcan says “This is a clear advantage for Apple as the company is known for its meticulous attention to security, also proven in other industries before like in the case of the MP4 technology that revolutionized the music industry.

Back in 2009, Apple’s iPhone entered China with a cross-subsidised deal with China Mobile, which helped it attract a high number of middle-class consumers. With the steady annual wage increase in China, Apple’s potential customers are continuing to increase, Ozcan says.