THE Chinese mobile payments industry is lousy with riches. In 2016, the total transaction value of the entire country topped CNY38 trillion (US$5.52 trillion), tripling 2015 numbers, according to Beijing's Research outfit.

The most profitable tech company in the world, Apple Inc., has struggled to make substantial progress in China’s mobile payments scene.

The market is valued around US$5.5 trillion. In comparison, the US mobile payments market increased 39 percent last year to touch US$112 billion. It’s safe to say China’s the place to be if you’re a mobile payment company.

Though the market is largely monopolized by Alipay and Tencent – the two tech giants control roughly 90 percent of the market share of the mobile-payments industry – and considered mature, the Chinese mobile payments market is vibrant despite expectations that eventually double digit growth in the region will cool down.

We are seeing more and more entrants into the fintech scene, from both traditional financial institutions and non-finance companies, suggesting barriers to entry are still relatively low and the market is still ripe for the reaping.

Most retailers carry only Alipay or WeChat Pay, making it difficult for Apple to gain more recognition despite the backing of the country’s biggest banks and extensive clearing networks.

When the company debuted their payment services, Apple teamed up with China UnionPay Co. who would provide a 10 million machine-strong point-of-sales (POS) network it needed to enable bank card capabilities and provide final mile services. They also engaged a dozen partners to make up in reach what they lacked in local know-how.

Despite what seems like a winning strategy, the simple fact is that using Apple Pay would result in more costly in-app transaction fees for consumers and higher equipment costs for merchants who would have to obtain specialized communication devices to run it.

Source: techwirasia