Following Monday’s report that Apple is planning to launch Apple Pay in China in February of next year, Bloomberg reports that it has reached a preliminary agreement with UnionPay to use its card-processing terminals. The agreement was an essential step along the way as UnionPay has a monopoly on card-processing in China.
The agreement is provisional, as it still requires the individual banks to agree. They have reportedly been reluctant to agree to the 0.15% cut Apple takes of each transaction. Given the transaction volumes involved, that soon adds up to a significant chunk of the tiny percentage banks charge retailers.
That isn’t the only hurdle Apple needs to overcome …
Apple still needs regulatory approval before it can legally operate in the country. It had been suggested at one stage that Apple might partner with Alibaba – responsible for a very high percentage of card transactions in the country. Apple confirmed last year that it had been in talks with the company, but things have gone very quiet since then.
CEO Tim Cook has repeatedly expressed his enthusiasm for taking Apple Pay into China, saying that he is “very bullish” about the prospect.
Photo: Nelson Ching/Bloomberg