Tuesday, 16 February 2016

Adoption of Apple Pay in China does depend largely on the alliances Apple builds

Apple Pay is launching in China Pinar Ozcan. In this regard, the industry has different opinion and excitement. Here is what Warwick Business School's Associate Professor of Strategic Management and researches Apple Pay and mobile payment.

Dr Pinar Ozcan said: "Adoption of Apple Pay in China does depend largely on the alliances Apple builds, particularly with financial institutions. 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. 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. 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 revolutionised 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."