Apple Pay may have found its perfect market in China

Obsession
Future of Finance
Obsession
Future of Finance

As Apple Pay expands to China in early 2016, analysts think conditions are ripe for Apple’s mobile wallet to be a hit with consumers there.

American shoppers have been wary of Apple Pay so far—only 15% of US iPhone 6 owners have even tried it. Many analysts say this is because mobile payments are still new and unfamiliar in the US.

That’s not the case in China—AliPay, a mobile wallet owned by e-commerce giant Alibaba, has 350 million registered users, and 2.28 billion mobile transactions took place in China in the second quarter of 2015 alone. In addition, there are already a lot more payment terminals that support Apple Pay in China than in the US.

A large percentage of the iPhone’s in China should work with Apple Pay. According to research from TechPinions‘ Ben Bajarin (paywall), 50% of the iPhones in China will be Apple Pay-compatible by Q2 2016. By comparison, Bajarin estimates 40%-45% of iPhones in the US are Apple Pay-ready. (Apple Pay requires a technology called NFC, and only new iPhone’s have the necessary chip.)

It’s hard to pin down how many iPhone’s have been sold there because Apple only reports “Greater China” sales, which includes Taiwan and Hong Kong (another country where Apple Pay is expanding this year). However, China has been driving iPhone sales for the past few quarters, suggesting plenty of phones are ready for tapping on terminals.

All told, conditions couldn’t be better: retailers are ready to support the technology (which has been an issue in the US), consumers are comfortable and experienced with mobile payments, and a lot of iPhones are Apple Pay compatible. That combination could make China more important than the US for Apple Pay.

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