Not only are business owners not familiar with Apple Pay, but also Union Pay, Apple Pay’s key partner in China, is also worried about Apple Pay’s market outlook. That’s why it couldn’t wait and turn to QR codes. During Double Twelve shopping festival in 2016, Union Pay announced its official QR code payment standards, marking Union Pay and China’s commercial banks’ entry in the QR code scanning payment battle. However, Union Pay’s method was different from that of third-party mobile payment tools such as Alipay, but similar to Apple Pay, since it adhered to the existing four-party payment model, involving debit card issuing organization, issuing bank branch, bill acceptance bank and business owners.

　　Union Pay and major commercial banks are not only key partners of Apple Pay, but also major promoters of the service. However, Union Pay and major commercial banks that supported Apple Pay, including ICBC, China Construction Bank, China Minsheng Bank, CITIC Bank, China Merchants Bank, etc., have all launched QR code scanning payment products. Although they would still support NFC payment, it seemed inevitable that Apple Pay has meet with a cold welcome here in China.

　　Two fundamental problems holding Apple Pay's development in China

　　“To use Apple Pay, you have to use and iPhone and find a store that supports Apple Pay. At the same time, you would find that MeiTuan Wallet, Nuomi Wallet, Alipay, WeChat Wallet and QQ Wallet have all kinds of discounts and vouchers,” a Chinese internet user said jokingly. However, he hit the nail on the head and pointed out the exact problem Apple Pay had in the past year.。

　　At present, Union Pay’s service rate for Apple Pay ranges from 0.38 to 1.25 per cent, while that of WeChat Wallet and Alipay ranges from 0.6 to 2.0 per cent. In addition, since WeChat Wallet and Alipay often carried out subsidy and discount both for consumers and business owners, many business owners would prefer to use WeChat Wallet and Alipay than Apple Pay.

　　Moreover, both consumers and business owners have to consider the cost to use Apple Pay. For users, they have to buy iPhone6 and above versions and add credit cards to their Apple Pay accounts; for business owners, they have to upgrade their POS machines that support NFC payment. Only when can users successfully use Apple Pay. According to Tencent’s in-depth report of the Chinese smartphone market in 2016, iPhone only accounted for 25 per cent. Therefore, 75 per cent of Chinese smartphone users can’t use Apple Pay at the very beginning.

　　What’s more, not all 25 per cent of Chinese iPhone users have iPhone6 and above versions. Therefore, there are even less Apple Pay’s potential users. For business owners, when they can receive bills through Alipay and WeChat Wallet’s QR code, why do they bother to spend money upgrading their POS machines?

　　To some degree, WeChat Wallet and Alipay have already almost dominated all the potential markets of Apple Pay. These Chinese mobile payment giants have spent a huge sum of of money and subsidy in nurturing both consumers and business owners’ habit. Indeed, they have taken up almost the entire Chinese mobile payment market, from supermarkets to roadside stands

　　In a word, high entry and low subsidy have become two of the most urgent problems of Apple Pay.

　　A brighter future for NFC payment?

　　To some degree, NFC payment is safer than QR code scanning payment. However, POS machines that support NFC payment aren’t widespread here in China. Moreover, some vested interest parties are also blocking the upgrading of POS machines. When we take a close look at the entire Chinese NFC industry chain, we can’t find any mature of successful example. Even Apple Pay and Union Pay together failed to accelerate the development of this market. It is safe to say they interests aren’t well-coordinated along the industry chain. From this aspect, there is still a long way before NFC payment can replace QR code scanning payment.

　　Although Apple Pay have to face lots of challenges right not, some analysts are still optimistic about its development. Compared to QR code scanning payment, NFC-based Apple Pay is still safer and more convenient. While users have to unlock their smartphone, open the APP and find the QR code to pay the bill, Apple Pay users only need to bring their iPhone/Apple Watch close to a POS machine. In addition, NFC payment has already been bringing more convenience to Chinese. For example, Xiaomi Pay and Huawei Pay have already supported users to pay their transportation fee at the subway and on buses simply by bringing their smartphones near the billing machine.