Apple is talking to Chinese e-commerce company Alibaba about bringing Apple Pay to China, according to a new report from the Wall Street Journal.
“Right now, I think what we can say is that this is focused on the China market for Apple,” senior Alibaba executive Joseph Tsai is quoted as saying. “We are positive about the potential cooperation, but it depends on the details being worked out.”
A possible partnership between Apple and Alibaba would likely include Alipay, China’s dominant online payment processor which is on the verge of going public. An agreement between the two companies would integrate Apple Pay in a way that would let iPhone owners in China pay using funds from their Alipay accounts.
A potential roadblock could be the restrictions and limitations placed on Apple operating a mobile payments business in China. Alipay has already negotiated its share of roadblocks while going up against the state-owned UnionPay, which uses NFC payment technology similar to Apple but without the extra security of Touch ID.
Apple, meanwhile, has previously experienced resistance from the Chinese government at various stages — from accusations that the iPhone is used to spy on citizens, to demands that it switch iCloud over to state-run servers in order to keep operating in the country. Most recently, the best-selling iPhone 6 and 6 Plus devices were later than expected arriving in China due to a sudden lack of regulatory approval.
Given the success of the iPhone 6 in China now that it has arrived, teaming with Apple would also be a good move for Alibaba since its current Alipay system is based on the clunkier and less efficient concept of scanning QR codes.
Ultimately, the partnership would be great for both companies. Tim Cook has noted that getting Apple Pay up and running in China is top priority for Apple and this would be a fantastic way to go about bringing that plan to fruition.