November 28, 2014 -
China-based credit and debit card issuer China UnionPay recently began promoting its mobile payment service AndroidPay for Android-based smartphone developers in advance of its potential launch in the third quarter of 2015, according to a report by Want China Times.
Though similar to Apple’s ApplePay service, which uses fingerprint recognition in concert with Near Field Communication payment methods, AndroidPay differs in that UnionPay can select more partners to develop the security recognition modules.
As a result, UnionPay could potentially have a greater impact on users than ApplePay, said Mobile China Alliance director Wang Yanhui.
Insiders said that UnionPay has already approached a few domestic smartphone makers including Coolpad and Lenovo, despite AndroidPay still being under development and not having established a specific business model.
And while Apple takes a commission on each payment made through ApplePay, UnionPay will have greater control on how commissions are distributed with AndroidPay.
Additionally, UnionPay will likely subsidize mobile phone manufacturers for the extra cost of the NFC chip that is required to enable online payments.
Earlier this month, Apple’s Chinese operations said it would accept UnionPay cards for payment at Apple’s App Store in China, which many industry experts said marked the first sign that the two companies might form a partnership to expand ApplePay to China in March 2015.
UnionPay is also reportedly using AndroidPay as a launch pad to expand from Apple’s payment system to the Android system.
Still, UnionPay’s AndroidPay will face strong competition from Alibaba’s Alipay, which currently commands China’s payment market with market shares at around 80%.
Last month, Apple CEO Tim Cook was reportedly looking to expand Apple Pay’s reach to China in a potential deal with Alibaba.