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Apple Pay to launch in China with UnionPay

Apple Pay has teamed up with bank-card processor China UnionPay and 15 Chinese banks to bring the mobile payment service to China as soon as early 2016. The move, which was reported last month still requires testing and certification by Chinese lenders.

The deal will bring Apple Pay to a market where electronic payments have already taken off. In China,

Apple Pay Logo against a contactless acceptance mark

Apple Pay to launch in China with UnionPay

more than 304 million people made online payments last year, according to the official China Internet Network Information Center, while more than 361 million shopped online and more than 282 million banked online.

The market is dominated by Alipay, an electronic-payment service affiliated with Alibaba Group, and Tencent Holdings, which has integrated payment system into its popular WeChat instant-messaging mobile app. Both make it easy for Chinese users to pay for many services they can often access within the payment app itself.

Unlike Apple Pay, which uses NFC technology that requires that the user be close to a checkout counter or a scanner, the Chinese services can largely be used anywhere.

UnionPay, which holds a monopoly on processing bank-card payments in China, said Friday it struck a deal with Samsung Electronics to work with the South Korean company’s Samsung Pay smartphone card-management system. In recent days it said it launched its own QuickPass mobile payment system in conjunction with 20 Chinese banks on phones that run Google’s Android software. In an interview on the sidelines of China’s World Internet Conference in the city of Wuzhen, UnionPay President Shi Wenchao said QuickPass would “level up users’ experience.” He also said UnionPay welcomes competition.

“No matter what kind of payment it is, as long as it complies with the laws and demands in the local marketplace, as well as fulfills consumers’ needs, we will all be welcoming,” Mr. Shi said. “UnionPay is not afraid of competition, which is a good chance for us to break past our old steps and level up our services.”

UnionPay is connected to China’s State Council, or cabinet, and China’s central bank. Its grip over payments has sparked a long-running trade dispute. China has said it would open the market to players like Visa Inc. and MasterCard Inc.

Apple Pay’s financial arrangements in China weren’t immediately clear. In the US, Apple gets 0.15% of all credit-card transactions through Apple Pay and 0.5% per debit transaction, according to people familiar with the matter.

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