This Question originally appeared on Quora - the knowledge sharing network where compelling questions are answered by people with unique insights.
Answer by Brian Roemmele, Alchemist & Metaphysician, on Quora.
A: For many reasons China will become one of the largest and most successful markets for Apple Pay. This will quickly become one of the most important and influential markets for Apple Pay.
UnionPay Is The Largest Payment Network
China UnionPay was founded on March 26, 2002, as a payment card association operating under the approval of the People's Bank of China central bank. UnionPay is the largest issuer of payment cards and also has the largest number of card holders with the largest transaction volume.
Today [1] Apple and UnionPay announced an agreement that will start in early 2016 for UnionPay cardholders to load their cards onto their iPhones for use with Apple Pay in China and around the world.
In early 2009 UnionPay card issuers began offering debit cards with EMV and NFC technology embedded. This is system is called QuickPass. Most UnionPay card holders have a debit card and can only transact funds which are withdrawn from a bank account and stored on the card itself as electronic cash. UnionPay member banks also issue credit cards but it is a relatively small but growing percentage of cards in circulation. UnionPay has card acceptance around the world. The payment processing is performed, in most cases through partnerships with local networks. In the US Discover processes UnionPay transactions. The growth of iPhone adoption in China makes it the largest and fastest growing market in the world.
Largest Concentration Of NFC Devices
UnionPay is in a unique position when compared to any other payment association. They specify the exact technology, manufacturer and features of the payment terminals in China. The relationship with the government assured very high adoption. There are about 6.3 million Apple Pay ready payment terminals in China as of early 2015. This represents the largest concentration of NFC devices in a single country.
A vast majority of Chinese are familiar with using an NFC enabled card and also a cell phone for payments. Alipay and WeChat are primarily cell phone based payment systems and have the largest payment transaction volume in the world for this type of system.
A Huge Success Is Predicted
Thus I am certain that Apple Pay will not only be a huge success in China, it will quickly become the largest market for Apple Pay.
I am mapping UnionPay QuickPass locations that accept Apple Pay on the Pay Finders app (
Building the largest Apple Pay location map in the world) It should be available in the first quarter of 2016.
...
Answer by Bozo Juretic, in the payments industry, on Quora.
A: Apple Pay will never become a serious payment method in China. Chinese are smarter than the Americans give them credit for, and will not give a sensitive piece of infrastructure like payments to an American company. No way. Besides, Apple Pay is a way more primitive payment method than the ones which already exist in China.
By almost an accident, I became involved in the Chinese payments market in the last year, in the sense that I know all the major players, have boarded Chinese merchants and have negotiated deals with Chinese payment providers. Also, I studied the existing payment methods in China, as part of our initiative at
http://Pencepay.com to offer an alternative payments platform to the mainland Chinese exporters.
The Chinese market is already ruled by Alipay and TenPay (WeChat Payments) in such a way, that Apple Pay looks like a toy/gimmick compared to it. Alipay and TenPay enable EFT POS payments for a long time, are hugely used, and there are hundreds of millions of people using their smartphone apps to pay both in offline and online stores. Alipay is so huge in China, that it is the equivalent to several top US mobile carriers joined together. TenPay is upcoming, but similar.
Also, WeChat Payments is a superior payment method to anything I have seen in the West. Like, ten years more advanced. Why? It enables a customer to communicate with the merchant in real-time, and to pay in real-time. This is huge, much more than people in the industry realise. It is already used by businesses on a daily basis to pay each other for B2B activities. I know people who use WeChat app for all their daily payment and communication needs, and they hate using their UnionPay card directly.
UnionPay may have a big network, but a) Alipay implemented a connection to all the Chinese banks directly, and b) although by law everybody has to use UnionPay processing network in China, Alipay is so strong that they just didn't bother to comply with that law and nobody can touch them.
This is why I say that Apple Pay is a gimmick/toy in Chinese market. It solves a non-existing problem, and is American, and both are negative in the view of the Chinese. Don't get me wrong, the Chinese will allow Apple Pay, but it will be in the sense of "keep your friends close, and your enemies closer".
Now, there are ton of problems in Chinese payment markets, mostly having to do with exporting products and services from China - if merchant runs his own webshop (and does not use Taobao, Tmall and other marketplaces) and those are the problems I am working on solving, but after I studied the Chinese market I concluded that they are 10 years more advanced than the US and the EU.
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