Will Apple Pay succeed in China?

By Mybloodtypeiscoffee - Own work, CC BY 4.0

Despite Apple’s optimism of its Apple Pay app becoming the “killer of cash”, its lacklustre performance in the Chinese market has people speculating on its future. Can Apple Pay compete with China’s mobile payments giants, such as Alipay and WeChat pay? Moreover, does Apple Pay have to sacrifice Apple’s exclusiveness in order make gains in China?


On 28th of October, Apple released the new Macbook. After the conference for the new product, Tim Cook, the CEO of Apple, indicated that Apple Pay has been gaining popularity world-wide. Cook also stated his company was “going to kill cash … [since] nobody likes to carry around cash”. Moreover, Cook also told reports that he himself mainly uses Apple Pay for purchases.

When Apple Pay entered the Chinese market in February it was met with rapid growth. However, in recent months after its hype died down, its growth has slowed to a standstill. The inability of Apple Pay to corner the Chinese market is due to Alipay, WeChat pay and Baidu Wallet.

Cashless mobile payments aren’t a new concept in China 

Though China isn’t a pioneer in the internet industry, its large pool of manpower and reliance on the online sphere, have allowed Chinese internet companies to outperform their counterparts in the US.

Alipay and Taobao are some of those companies. Taobao and Alipay started to expand nearly a decade ago, and through extensive targeting of consumers, the latter companies were the first to introduce the notion of cashless forms of payment to China. Accordingly, the market for cashless mobile payments has seen rapid growth in China, and Chinese firms such as Alipay and WeChat pay, have been able to effective place their stake in the market. Putting foreign competitors such as Apple pay, at a disadvantage when entering China’s cashless mobile payments market.

Is Apple Pay’s exclusiveness hindering its growth?

In order to “kill cash”, you need an alternative and the usual substitute for cash was credit cards or bank cards, however in this new age of the internet, payments through mobile phones are the new trend.

Accordingly, Apple Pay’s cashless payment method is exclusive to its products. Consequently, less than 20% of Chinese users own an iPhone, meaning that Apple has failed to reach 80% of China’s mobile phone users.

Nonetheless, Alipay and WeChat pay have been able to effectively target the 80% of Chinese users who don’t own an iPhone. Moreover, since Alipay and WeChat pay are exclusive to any certain mobile phone, the latter apps may be installed on iPhone’s as well.

Additionally, Apple Pay requires merchants to upgrade their equipment, so there are compatible with its high-tech purchase interface, unlike Alipay and WeChat pay, which don’t require any upgrades. Therefore, Alipay and WeChat pay are far more convenient methods of cashless payment, for both consumers and merchants.

Apple pay’s biggest competitors

Alipay is China’s number one cash less payment method, due to its versatility, which allows users to utilize the app for a myriad of personal as well as commercial purposes. Alipay is so comprehensive that it allows consumers to pay utilities, book tickets or order takeout through its interface.

The second most used cash less payment method in China is WeChat pay. Since anyone with a phone number can register to WeChat, its user base is primarily middle aged and elderly users, who aren’t as tech savvy as millennials. WeChat pay offers an easy to use inference and is often an alternative to those who didn’t have access to Alipay originally.

In light of the fierce domestic competition for China’s cashless mobile payments market, Apple Pay has showed up to late to the race, as it lacks partnerships or affiliations with popular Chinese ecommerce or online platforms.

Without proper insight and understanding into China’s mobile payments market, Apple has stumbled its way into a fiercely fought over market, which it’s unready and unable to tackle. If Apple pay seeks to succeed in China, it must surrender itself to the Chinese economic model of mobile phone payments. The latter model would mean Apple pay must give up its exclusiveness for inclusiveness, in order to garner as many consumers as it can.

Strategies Apple can undertake to corner China’s cashless payment market

Apple Pay’s main competitor in China is not Cash. Instead, it is competing with two other cashless mobile payments giants.

In order to effectively compete with Chinese companies, it needs to launch a successful promotion strategy to attract numerous Chinese consumers to its side. If it can entice Chinese consumers by offering promotions to partners, who then go on to offer discounts to consumers using Apple Pay, or it can open its own stores and offer discounts directly to consumers.

Therefore, if Apple Pay wants a large stake in China’s cashless mobile payments market, it needs local partners and affiliates, to vouch for it and help make the app an everyday necessity. Subsequently, in order to do that, it needs to offer its local partners generous allowances and give up its exclusiveness in favour of inclusiveness.