Policy Change in China Presents Opportunity for Apple and Alibaba

Mobile CommerceA policy change from the Chinese government may pave the way for a partnership between Alibaba and Apple Pay, writes Scott Cendrowski in an article for Fortune. China’s State Council has announced that the country is opening the door to foreign credit card companies like MasterCard and Visa, which had previously been forced to operate under the auspices of UnionPay, the state’s presiding online payment monopoly. That should effectively allow a service like Apple Pay to operate within the country.
Meanwhile, Alibaba’s online commerce system Alipay might now be able to operate offline in China, having previously avoided UnionPay’s rules and fees by setting up shop entirely online, shuttering its point-of-sale services last August. But with the iPhone already such a hot commodity in China, and Apple Pay poised to dominate the mobile commerce market, it would make sense for Alibaba to seek some sort of partnership or accommodation with Apple, and its Executive Chairman, Jack Ma, has suggested as much in recent days. This would benefit Apple too, since Alipay is so wildly popular in the country.
With the mobile revolution unfolding all over the world, and biometric security technologies like fingerprint scanning being integrated into both high-end and lower-end smartphones, it appears that consumers are primed to embrace mobile commerce. Now that China has relaxed its rules about who can enable those transactions, a huge new market may be about to open up to both Alibaba and Apple.