The launch of Apple Pay in China, originally expected to be part of iOS 8.3, has been delayed by stalled negotiations with both the state-owned card processor UnionPay and Chinese banks, reports MarketWatch. Developers had originally been told that iOS 8.3 would support UnionPay, but found that support was missing when the update rolled out last week.
A UnionPay employee who declined to be named said the company has not reached any agreements with the U.S. tech company, and no timetable for cooperation has been set […]
Those sources also say Apple has not made any breakthroughs in talks with Chinese banks, which would also have to agree for the Apple Pay system to work.
The banks are reportedly unhappy about the cut Apple takes from each transaction …
In the U.S., card processors typically charge 2% for each credit card transaction, and Apple takes 0.15% from that slice. While the percentage is small, high transaction volumes mean that the total sums involved are substantial.
Chinese banks argued those charges were too steep, an employee of a large bank said. Many large banks that are already part of mature point-of-sale networks do not want to lose such a large percentage of their profits in a deal with Apple Pay, he said.
While Apple could begin the Chinese rollout with a limited number of banks, it cannot do so without UnionPay as the payment processor has a monopoly on card processing in the country.