Apple plans to bring its Apple Pay mobile payment service to China in early 2016, opening a major new market in the tech giant’s effort to transform how people shop.
Apple (AAPL) said on Thursday that it would work with 15 major banks in China to make Apple Pay available including China UnionPay, Bank of China, China Construction Bank, Industrial and Commercial Bank of China, and Agricultural Bank of China.
The state-owned payment processing system, China UnionPay, is the only provider of Chinese bank cards, with more than 4.5 billion cards issued worldwide. Apple’s mobile payments service will let iPhone, iWatch, and iPad users connect the payments service to their bank accounts.
Introduced in 2014, Apple Pay lets users upload credit and debit card information to a “mobile wallet.” Customers can then use their iPhone or Apple Watch to pay at retail stores that have point-of-sale registers equipped with near field communication technology, known as NFC.
The service is currently available in the U.S., U.K., Canada, and Australia.
People can also use their Apple Pay accounts to pay for items within apps if the app developer has integrated the service. Apple is also planning to expand to Spain, Singapore, and Hong Kong via a partnership with American Express.
Specific to the partnership with China Union Pay, Chinese users will be able hold their iPhone or Watch near China UnionPay’s NFC-enabled payments terminals to pay for a purchase. The process eliminates the need to carry a wallet full of credit cards or cash.
It’s no surprise that Apple is targeting China for its next international expansion because of its increasing importance to the company. In the fiscal fourth quarter, Apple’s revenue in China doubled to $12.5 billion, and CEO Tim Cook recently said that China would eventually be Apple’s top market.
“Apple Pay has revolutionized the way millions of people pay every day with their iPhone, Apple Watch and iPad,” Eddy Cue, Apple’s senior vice president of Internet software and services, said in a statement. “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.”
But China is also a very competitive battleground when it comes to mobile payments. Alipay, a mobile wallet operated by Alibaba (BABA) spinoff Ant Financial, has over 350 million users in China. Tencent also offers a mobile wallet called Tenpay. According to research firm Analysys, Alipay’s share of the mobile payments market in China was around 45%, with Tenpay commanding nearly 19%.
Search giant Google (GOOG), which operates its own mobile wallet Android Pay, is reportedly partnering with Ant Financial for expansion of its app store, Google Play, in the country.
For more about challengers to Apple Pay, watch this Coins2Day video:
