Apple sidelined as Beijing travellers pay for transport via Android

iPhone maker’s policy of using own cash app gets it 1% of China’s mobile payments market

Apple was locked out of the Beijing public transit payment system because of its policy of reserving contactless payment  to its Apple Pay app. Photograph: Josh Edelson/AFP/Getty

Apple was locked out of the Beijing public transit payment system because of its policy of reserving contactless payment to its Apple Pay app. Photograph: Josh Edelson/AFP/Getty

 

Everyone in Beijing can now pay to use public transport with their smartphone – that is, everyone except Apple iPhone users.

Beijing’s public transport payments company Yikatong on Monday launched an app that allows most Android smartphone users to pay for journeys by tapping their smartphone rather than their transport card.

The app fits well with the Chinese habit of using smartphones to pay for anything from utility bills to street food, and will serve as a template for transport systems across China. As such, the exclusion of iPhone is a blow for Apple.

The event shows just how badly the technology group is being beaten in mobile payments in China, the world’s largest mobile market with an estimated $8.8 trillion in transactions in 2016, according to iResearch.

Apple was locked out of the Beijing public transit payment system because of its policy of reserving contactless payment – that is, the ability to pay for something by waving a phone in front of a terminal – to its Apple Pay app, rather than granting access to third-party apps such as Yikatong’s, or popular payment systems such as Tencent’s WeChat Pay and Alibaba’s Alipay.

Android-based competitors such as Samsung, Huawei and Xiaomi allow contactless payments linked to these apps.

“[Apple’s policy] is counterproductive,” said Mark Natkins, managing director of Marbridge Consulting in Beijing. “It potentially locks them out of a variety of initiatives, particularly the major push in China to introduce smart city initiatives.”

WeChat Pay and Alipay are integrated into social messaging and ecommerce apps offered by Tencent and Alibaba, and are therefore popular. They also utilise scanning a QR code with a phone camera to make a payment, something Chinese consumers are used to, rather than Apple’s system of waving the phone at a terminal at the cash register.

The upshot is that Apple has been relegated to less than 1 per cent of China’s mobile payments market. – (Copyright The Financial Times Limited 2017)