Apple Inc launched its mobile payment system in China on Thursday in a bid to convince the hundreds of millions of users of the country's entrenched, dominant services to switch.
"We think China could be our largest Apple Pay market," Jennifer Bailey, vice president of Apple Pay, told Reuters in an interview in Beijing.
In an early boost, China's biggest lender, Industrial and Commercial Bank of China Ltd, was among the banks that said earlier this week that customers would be able to use Apple Pay from 18th.
Greater China is Apple's second-largest market by revenue, and the world's biggest smartphone market. By the end of 2015, 358 million people, more than the U.S. population, had already taken to buying goods and services by mobile phone, according to the China Internet Network Information Center. The vast majority are using payment services from China's two biggest Internet companies that have existed for years.
Social networking and gaming firm Tencent Holdings Ltd operates WeChat Payment, and e-commerce company Alibaba Group Holding Ltd, through its Internet finance affiliate Ant Financial Services Group, runs Alipay.
"With 100 percent saturation of local payment systems, no one in China is clamoring for Apple Pay," said one retailer who declined to be named for fear of harming business prospects. "Today, everyone has a local payment option on their phone, so Apple Pay is a solution in need of a problem."
Deeply ingrained in China's Internet, domestic payment services cover much more than ride hailing, food delivery and online shopping. Users can invest in wealth management funds, pay utility bills, send gifts to friends and give to charity.
The U.S. firm has 19 of China's biggest lenders as partners. That means 80 percent of China's credit and debit cards are eligible for Apple Pay, usable at about one-third of all locations that accept those cards, Apple's Bailey said.
"China UnionPay and our Apple Pay solution has a huge advantage, given the footprint of China UnionPay," she said. "Its merchant acceptance network far exceeds what any of the other mobile platforms have today."