Mobile & Online Payments

Alipay goes on offensive against Apple Pay

Alipay against Apple Pay. Image: SaimonSailent, Shutterstock.com
Written by Arnie Cho

Things are hotting up in the mobile wallet space in China, says Arnie Cho, with Alipay against Apple Pay in a technology head to head.

Three months on from Apple Pay debuting in the Chinese market, Alipay has teamed up with Huawei. While Apple focuses on the hardware aspect of mobile payments, Alipay is benefiting from strengthening its role in the mobile payment ecosystem.

Since Alipay introduced QR payments, it has been chipping away at the payment business enjoyed by banks and UnionPay. As such, the incumbents felt a sense of hope when Apple Pay launched in China earlier in 2016 – the technology is based on NFC, thus the traditional network. However, it seems the optimism of Chinese banks and UnionPay will be short-lived.

Besides being a true mobile wallet, Alipay has teamed up with Huawei to launch a one-second QR-based pay feature on the Huawei P9 model, in response to Apple Pay’s China entry. This feature will also be available on other mobile devices that have fingerprint recognition capability.

Alipay’s refinement of the proximity payment experience, allowing users to complete the payment process in less than a second from the phone being in standby screen mode, will reap dividends. Additionally, while the payment threshold for Apple Pay is set at CNY 500, Alipay allows payments without a PIN of up to CNY 2,000, with guaranteed fraud protection up to CNY 1m.

Apple’s improvements to its mobile payment capability focus too much on the hardware. Alipay’s approach to developing the payment ecosystem distinguishes its offering as a true mobile wallet. In the evolution of payments, consumers will not adopt mobile-based payments for the sake of it, but will find Alipay’s mobile wallet leading them to make the change.

– This article is reproduced with kind permission from Verdict Financial. Some minor changes have been made to reflect BankNXT style considerations. Read more here. Image: SaimonSailent, Shutterstock.com

About the author

Arnie Cho

Annie Cho is a senior analyst at GlobalData, specialising in APAC payments and retail banking.

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