This is the era of mobile payment systems, and Apple Pay has aimed at revolutionizing it with its state-of-the-art technology in the iPhone 6. However, just as Apple Pay gears up for a launch in the Chinese telecommunications market, Android Pay is now stepping in to give it some tough competition.
Last month, Apple Inc. (NASDAQ:AAPL) launched Apple Pay all over the US, a new mobile payment system designed for the users of iPhone 6 and 6 Plus, allowing them to make wireless payments at selective stores using just their iPhone devices. However, the technology did not gain much momentum, as stores shifted back to mainstream methods of payment and the distribution of the technology did not reach out farther than North America.
Now, Apple Pay hopes to find its salvation in China, an untapped market booming with opportunity for the new mobile payment system. But, Android Pay is there, waiting to crash the party.
The name of the service is misleading, as Android Pay sounds like a system which Google would launch. However, Android Pay is actually being launched by UnionPay, which currently holds the largest credit/debit card payment network in the country.
Android Pay is not an integrated module in Android smartphones, like Apple Pay is in the iOS 8.1. It is, in fact, an app based on the Android-platform, which UnionPay hopes to launch by the end of 2015.
Even though Apple seems to have a growing market in China, UnionPay holds credibility in the mobile payment service industry. According to Wang Yanhui, the director of the MCA (Mobile China Alliance), users will prefer systems by UnionPay instead of Apple Pay because UnionPay’s system has more alliances to create “security recognition modules”, which simply means its system is more secure than Apple Pay in the Chinese context.
As far as functionality is concerned, Android Pay aims to use the NFC technology in smartphones, just like Apple Pay. The NFC technology is present in the iPhone 6, which supports Apple Pay, as well as most recent high-tech smartphones. To allow great accessibility to the Android Pay system, UnionPay has also pushed local manufacturers like Lenovo as well as Coolpad to introduce NFC technology in their smartphones.
China has, undoubtedly, one of the most complex banking structures in the world, so much so that Apple Inc. has had to rely on secondary banking links to allow Chinese users access to its app store. Only recently, Apple signed a deal with UnionPay, allowing its users the ability to make payments on the AppStore/iTunes using their Union Pay credit/debit cards.
UnionPay holds a much stronger grasp on the Chinese banking structure; therefore the Android Pay system will run much smoothly than the Apple Pay system. This is because UnionPay has one of the largest credit/debit card databases China has to offer so it exercises a great influence on retailers and partners in China.
Another player in the Chinese market is Alipay which is not only a direct competitor of UnionPay but it is also in talks with Apple to support its Apple Inc. (NASDAQ:AAPL) Pay launch in China. China is sure to become a battleground in 2015, as everyone is trying to establish a strong foothold in the mobile payment industry to fight for the top spot.
