Apple hasn’t always had the easiest time in China, and the latest reminder of this is the launch of a new scheme allowing users of Beijing’s transport system to pay through an app — although it’s not available on Apple Pay, or even iOS.
Instead, the service is only available via Android app, with the likely reason for the iOS lockout reportedly being because Apple sticks to its proprietary Apple Pay system, rather than supporting third-party payment apps.
Big trouble in bigger China
Prior to launching Apple Pay in China, Tim Cook described doing so as “top of the list” in terms of Apple’s priorities. Nonetheless, Apple faces an uphill battle in the country. At present, Aliba’s Alipay and Tencent’s WeChat Pay dominate the Chinese mobile payments market, respectively representing in the region of 53.7 percent and 39.5 percent of the market.
The decision to launch the Beijing travel app — created by public transport payments company Yikatong — on Android only can be read as another illustration of how Apple isn’t prioritized in China.
In the past, Apple has been forced to shut down its iBookstore and iTunes Movies in China, as well as been forced to accept the Chinese government’s demands that it run network safety evaluations on all Apple products before they can be imported into the country.
In addition, its products were booted off the list of approved state purchases, along with other Western companies such as Cisco and Intel — in favor of thousands of Chinese-made products. More recently, Apple ran into problems with internet regulators in China calling on Apple to “tighten its checks” on live streaming apps which appear in the App Store. It has also had to partner up with local data management firm Guizhou-Cloud Big Data Industry (GCDB) in order to meet new cybersecurity rules, requiring cloud services in the country to be operated by Chinese companies.
Apple’s not giving up
Apple has recently launched its biggest marketing campaign for Apple Pay in China since the service’s launch. Still, decisions like the one taken by Yikatong certainly seem to be designed to favor popular local manufacturers, all of which make Android handsets.
Apple, of its part, has struggled a bit in China as of late. According to analysts at Oppenheimer, Apple’s “Reality Distortion Field” is fading in China, as iPhone sales drop 20 percent. That’s at least twice as bad as any other market.
Whether Apple can negotiate a deal to use Apple Pay for Chinese public transport — as it has in Japan — remains to be seen. These kinds of deals, and preferably exclusives, are going to be crucial if Apple wants to ever break through in the mobile payments market, however.