Apple Pay is trying to work its way into the Chinese market

Apple Pay is trying hard to work its way into the Chinese market

Chinese banks will only have to pay half the leveraging costs of US banks as Apple Pay attempts to crack a country dominated by Alibaba.

The new deal in China will see its banks charged around 0.07% per transaction, compared to the 0.15% that the mobile giant charges US banks.

This isn’t the first time that Apple has had to negotiate its way around Apple Pay transaction fees. Australian banks took umbrage over the fees when Apple attempted to enter their market.

Unlike in the US, where at its launch Apple Pay was innovative and new, Australian banks like the Commonwealth Bank of Australia (CBA) have offered contactless payments (to Android users) for two years.

Apple vs Alibaba

This is a similar scenario to the one occurring in China, where the market is dominated by Alibaba-sponsored payments system Alipay.

The platform accounts for roughly 70% of mobile payments in China and is also integrated into WeChat, China’s most popular messaging platform.

According to Chinese site Caixan, Apple finally relented over the fees in an agreement with the 19 initial launch banks, who will also see a two-year freeze on payouts to the Cupertino-based firm.

Eddy Cue, Apple’s Seniot Vice President of Internet Software and Services, said last week: “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.”

Apple Pay has already got off to a good start, having 40 million Chinese users sign up to the service on day one.

By Alex Hamilton

by Alex Hamilton
Alex is Senior Reporter at IBS Intelligence, follow him on Twitter or contact him at: