Apple Pay Launching in China Tomorrow

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Apple Pay iPhone

After debuting in the United States (U.S.) more than a year and half ago, Apple Pay will finally be available in China tomorrow, according to the iPhone maker’s bank partners in the Asian nation

In its Chinese launch, the Cupertino-based tech giant has partnered with UnionPay, which holds a dominant position on card payments in the country, as well as with 19 other Chinese banks.

Unlike in America, however, paying for goods and services using mobile devices aren’t anything new to Chinese shoppers as Alipay, the financial unit of Alibaba (BABA), have enabled users to pay using their mobile devices for years. In fact, a lot of young people in major Chinese cities including Beijing, Guangzhou and Shanghai use mobile payments exclusively as opposed to paying with cash, just like millennials who only use credit and debit cards to pay for purchases in the U.S.

Recognizing the huge potential of online payments, which is projected to reach $3.5 trillion by 2018, Tencent Holding Ltd (OTCMKTS:TCEHY), China’s other technology giant, likewise implemented its own mobile payment system, which it integrated into its popular instant messaging app WeChat.

Currently, Alipay dominates mobile payments in China with a 50% market share, while Tencent holds 20%.

Apple Pay uses a technology called near-field communications technology that allows devices like smartphones and a payment terminal to interface with each other without relying on a telecom network.

Competing services from AliPay and Tencent, meanwhile, enable payments by transferring money from the user’s account to the merchant using a telecom network.

Apple Pay launched in the U.S. in 2014 and has expanded to Australia, Canada and the United Kingdom.

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