Alibaba agreement could give Apple Pay easier path past Chinese regulators

Posted:
in iPhone edited November 2014
An alliance with Chinese e-commerce giant Alibaba could help Apple avoid regulatory delays and move Apple Pay closer to debuting in China, according to an executive privy to the ongoing negotiations.



Alibaba Executive Vice Chairman Joseph Tsai gave some insight on his company's talks with Apple in a new interview with The Wall Street Journal published on Monday. In it, Tsai said discussions are progressing with the involvement of Ant Financial, the company within Alibaba that manages its Alipay payment service.
Apple and Alibaba executives are hopeful that an agreement could help their respective Apple Pay and Alipay services gain traction at retail in China.
Tsai said it would be in Apple's best interest to partner with Alipay, providing the iPhone maker with a potential advantage in navigating regulatory hurdles in China.

"If people want to use Apple Pay in China, Apple would have certain restrictions and limitations on operating payment businesses in China," Tsai said. "So we are thinking whether there is any opportunity for us to work together where Apple Pay and Alipay can somehow work together in China."

The Alibaba executive also said that it would be an "obvious possibility" for Apple Pay to utilize Alipay's back-end to process payments. This would enable users of Alipay, which at the moment is largely an online transaction service, to make payments from their accounts at retail.

Alibaba confirmed earlier this month that it's engaged in negotiations with Apple for a potential partnership between Apple Pay and Alipay. While Alibaba is an online powerhouse, Alipay has yet to take off in a meaningful way at retail, relying on clunky QR codes that can be scanned from a user's smartphone.

Apple Pay, however, relies on seamless near-field communication technology, and integrates Touch ID fingerprint scanning for secure authorization of transactions. A partnership is seen as allowing both companies to gain foothold in the Chinese market.

Alibaba is a substantial e-commerce company in China that was founded as is lead by Chinese billionaire Jack Ma, the wealthiest man in China. The company has a number of properties based around finance and payments, including its Taobao website, China's answer to eBay. The company's Alipay service is the largest online payment service in China, accounting for around half of all online transactions in the country.

Comments

  • Reply 1 of 6
    gatorguygatorguy Posts: 21,305member
    It should also be noted that Alibaba has reached out to Paypal for a payments partnership. Could be sincere or could simply be a negotiating tactic from Jack Ma, putting a little pressure on Apple for favorable terms. Personally I think they're sincere, perhaps seeing a link up with Paypal as a better way for Alipay into Western markets.
    http://bankinnovation.net/2014/11/alipay-pitches-paypal-on-jv/

    Edited: US was too restrictive. Alibaba has worldwide ambitions.
  • Reply 2 of 6
    Quote:
    Originally Posted by Gatorguy View Post



    It should also be noted that Alipay has reached out to Paypal for a payments partnership. Could be sincere or could simply be a negotiating tactic from Jack Ma, putting a little pressure on Apple for favorable terms. Personally I think they're sincere, perhaps seeing a link up with Paypal as a way into the US market.

    http://bankinnovation.net/2014/11/alipay-pitches-paypal-on-jv/



    That makes me want to see them partner with Apple even more, TBH. PayPal let the bozos get their tenterhooks into them. If David Marcus was still there, then I'd be okay with a PayPal partnership, but he's not.

     

    Alibaba may be popular, but they don't have the leverage to play hardball with Apple, and they know it. Apple doesn't really have the leverage either. In this case, both have mutual reasons for a partnership, and both stand to benefit, so I don't think it'll be an issue.

  • Reply 3 of 6
    The only partnership Apple will have with Alibaba is that Alibaba will accept ApplePay for payment. Anyone who says it is "in Apple's best interest" to partner with them is a snake. They are not interested in the customer like Apple is. Note that Apple's customers in China can use China's credit card on Apple Pay to make App Store ourchases. Soon Apple Pay will be allowed all over China. Apple is willing to work with the Chinese regulators to get Apple Pay Working. It doesn't need to work around them like Jack Ma.wants to.
  • Reply 4 of 6
    James: Where do you get your info from or is this just opinion?
  • Reply 5 of 6
    jakebjakeb Posts: 557member
    "Alipay has yet to take off in a meaningful way at retail, relying on clunky QR codes"

    Someone should tell CurrentC
  • Reply 6 of 6
    fallenjtfallenjt Posts: 3,982member

    With Apple Watch coming out to allow older iPhone models to use Apple Pay, I don't see why Apple stock won't soar. I guess first $trillion company won't be far away. $170/share is achievable.

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