Samsung has announced that it has finally made a deal with Alipay to broaden Samsung Pay’s reach in China, in a move that will no doubt have Apple worried…at least for the time being.
The deal, formed with Alipay’s parent company, Ant Financial, is significant because Alipay boasts 450 million active users and handles 175 million transactions a day, which makes it quite the monolith of the Chinese payments market.
Samsung beats Apple in China
Alipay’s incredible figures means that the advantages of partnering with the Chinese giant are obvious. As Samsung EVP Injong Rhee said: “The reception of Samsung Pay since its launch has been extremely positive and the service has already seen tremendous success in terms of availability and adoption by consumers. We ultimately want to make Samsung Pay available to as many consumers as possible around the globe.”
Users first have to register their Alipay account into Samsung Pay and then can start paying by using the service’s NFC and MST (Magnetic Secure Transmission) technology or by swiping up from the Lock Screen, Home Screen or Sleep Mode, selecting the Alipay QR code, and holding the smartphone up to the merchant’s scanner to scan the QR code at the register.
Whilst partnering with Alipay has obvious benefits, the Chinese payments giant also stands to gain something from the deal. The company has recently been looking West for new opportunities and branching out the services it can offer to Chinese tourists around the world. The company has also recently partnered with Uber, and a partnership with Samsung will help it broaden the services it offers.
“Alipay covers the vast majority of online payment use cases. At the same time, it also developed a variety of offline use cases, including restaurants, supermarkets, convenience stores, taxis, hospitals and public services. The technology integration facilitated by this partnership with Samsung Electronics will make the payment process faster and more convenient when users make payments at stores where Alipay is accepted,” said Fan Zhiming, President of Payment Business Unit at Ant Financial.
What about Apple?
Given Alipay’s dominance, it shouldn’t come as a surprise that Apple is also trying to strike a deal with the Chinese payments giant. Last year, Jack Ma, the executive chairman of Alibaba, of which Ant Financial is the finance arm, revealed he was hoping to do something with Apple.
“I hope we can do something together,” Mr Ma told the Telegraph.
Given the will and competitive need from both sides to work together, coupled with the fact that Apple has a 14.4% market share in China, more than Xiaomi (14.4), it surely won’t be long before the American giant makes a similar announcement.
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