Why is Apple Pay dominating the United States but marginalized in China?

Apple Pay has developed rapidly in the United States and has ranked first in the field of mobile payments. According to data released by Boston Retail Partners, a US retail consulting firm, 36% of retailers in the United States already support Apple Pay.

However, in stark contrast to Apple Pay's performance in the United States, its development in China can be said to be a failure. According to Analysys's statistics on mobile payment market transaction share in Q4 2016, Alipay and WeChat accounted for more than 91% of the mobile payment market in China, while Apple Pay could not even be listed as a separate statistic and was included in the "Other" category. If you recall, you will find that no matter which store you go to, you can basically see the Alipay and WeChat Pay logos, but how many times have you seen Apple Pay?

From a purely technical point of view, Apple Pay is more secure than Alipay and WeChat Pay. It is not affected by mobile networks and can be used offline. In addition, because it has no direct conflict of interest with banks, it has received strong support from banks and has many Apple fans in China. When it entered China last year, many people were optimistic about it, believing that Alipay, WeChat and other strong competitors had arrived. However, a year later, no one expected that Apple Pay would become such a marginal existence in China.

So why did Apple Pay fail in China?

When Apple Pay entered China, Alipay and WeChat had been deeply involved in the Chinese market for many years and had already occupied an absolute first-mover advantage. What's more, Alipay and WeChat had successfully cultivated users' QR code scanning payment habits. The NFC payment used by Apple Pay is different from the payment method that everyone is accustomed to. The pure payment process experience may be better than the QR code scanning method, but in some scenarios in China, the experience is really reluctant. It is just another form of bank card, and sometimes consumers even need to sign the receipt. Once the user's habit is formed, it will cost more to change it.

Alipay and WeChat have previously spent huge amounts of money on subsidies to cultivate merchants and users, and now have hundreds of millions of existing users. Supermarkets of all sizes, convenience store chains, restaurants, fast food restaurants, and even street vendors all accept WeChat or Alipay. In contrast, Apple Pay is mainly supported by some big-brand merchants, such as Starbucks, 7-11, Carrefour, etc., and the coverage of other merchants is too limited.

The reason why merchants have limited coverage is that Apple has not put much effort into promotion, and it is also related to the high hardware requirements of its payment devices. If the mall wants to support it, it needs to upgrade the POS machine, transform the ATM, and train the merchant POS cashiers, which is costly. The number of Apple users is not large compared to the number of mobile phone users in China. According to the latest statistics, the iOS system share in China currently only accounts for 13.2%, and the mobile phones that support Apple Pay are only iPhone 6 and above, so this proportion will be even lower. Merchants are profit-driven. After comparison, they find that launching Apple Pay will not help them much, but will increase costs, so they are naturally not interested in Apple Pay.

In contrast, Alipay and WeChat Pay have a huge number of users, and their subsidies, rebates, and discounts far exceed those of Apple Pay. The hardware requirements for the mall are also very low. You can simply print a QR code and stick it on the counter. If you were a mall, who would you choose?

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.