Apple will start accepting Alipay at its physical stores in China as part of its partnership with Alibaba. This is the first time a third-party mobile payment system will be supported at an Apple Store worldwide. The move also indicates Apple’s push for stronger ties with Alibaba as it aims to resurrect its position in the Chinese smartphone market.
According to Reuters, Apple will accept Alipay payments across it 41 brick-and-mortar Apple Stores in China. It is to be noted that Apple’s China website, iTunes store, and App Store have been accepting Alipay for over a year. However, it marks a debut for the third-party system to gain acceptance at the company’s physical stores.
Given China’s strict censorship on the internet and international brands, it is challenging for manufacturers to gain a strong foothold. In addition to allowing Alipay at physical stores, Apple is also looking at shifting its user data to China-based servers later this month to meet local rules. Last year, Apple also removed dozens of local and foreign VPN apps from its Chinese App Store to meet government demands.
In comparison, Apple’s own payment system Apple Pay has received a lukewarm response in the country. On the other hand, Alipay is China’s top mobile payment platform but is competed against by Tencent Holdings Ltd’s payment system which is embedded within the chat app WeChat which is the biggest messaging app in the country.
In 2014, reports emerged indicating a potential partnership between Alibaba and Apple to integrate Alipay and Apple Pay to create a comprehensive mobile payments solution for the Chinese market, MacRumors reports. However, that does not seem likely given Apple’s equal focus on maintaining its own ecosystem. The decision to allow Alipay appears to be a well-thought decision as Apple aims to penetrate the world’s number two economy.