China UnionPay

Apple Pay looks to have been a big hit in China, Internet Retailer reporting that three million bank cards were activated in the first two days of the launch. Apple had been expecting big numbers, using a gradual rollout of the service on day one, something not well communicated to cardholders.

In the first two days after the Feb. 18 launch, 3 million consumers linked their bank cards to Apple Pay according to China Merchants Bank, one of 19 Chinese banks involved in the rollout.

It’s an impressive number, but with card processor UnionPay having a monopoly on card processing, a single deal by Apple meant the service is available to a staggering total of 5B cards …

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Update: Apple has since informed us that the comment by a local representative was not an official statement and has been mistranslated from the Chinese by Caixan. The correct information is that the ability to add cards was being made available on a rolling basis throughout the day. 

With many Chinese iPhone owners reporting they they are unable to register for Apple Pay, an Apple spokesman representative has said the issues are due to too many people trying to sign-up a planned gradual rollout throughout the day. Mashable reports that 38 million bank cards had been linked to Apple Pay by 5pm on launch day, 10M of them registered within the first hour.

Chinese site Caixin cited one example.

“It kept telling me the phone ‘cannot connect to Apple Pay’ or the verification for the card is not available when I was linking a bankcard,” said Duan Ge, a 31-year-old employee of a film production company. Duan said he managed to link his debit card after about 30 minutes of trying, but later when he tried to register another credit card, he “could not even open the app.”

Some had feared that Apple might face an uphill battle in persuading Chinese nationals to use the service, for two reasons …

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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 … 
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