Apple Pay: Playing Catch-Up With Asia

Asia has a long and entrenched mobile payment landscape, with contactless transactions in China alone worth $17 billion.

While the rest of the world hails the introduction of near-field communication (NFC) based mobile payments through Apple Pay, smartphone users and developers across Asia are wondering what all the fuss is about.

It is safe to say that Asia is ahead of the game (and has been for a while) when it comes to mobile payments. Almost every aspect of Apple Pay already exists and is being enthusiastically used by retailers and customers alike across the territory – here is a breakdown:

Apple Says: One Touch to Pay

Apple Pay uses NFC to enable contactless payment in-store – all users have to do is hold their phone near a contactless reader to make a payment. 

Why Asia Is Ahead

In 2013, CapGemini was predicting China’s dominance in the contactless payment market. In fact, China introduced payments via NFC as early as 2009, when it established the China National Advanced Payments System, which enabled businesses to easily develop and launch mobile payments, e-billing, and real-time payments.

Since then, the market has gone from strength to strength, with contactless transactions reaching around $17 billion last year.

Apple Says: Fingerprint ID

The new iPhone 6 uses fingerprint identification to ensure secure payments – no need to get out credit/debit cards or remember PINs.

Why Asia Is Ahead

Earlier this year, PayPal and Samsung teamed up to offer this security feature to Galaxy 5 users in Singapore – the first country in the world to be able to take advantage of fingerprint identification.

And Alipay’s 100 million-plus subscribers will be able to use the same technology for secure payments both online and in-store, on the new Huawei Ascend Mate 7 smartphone.

Apple Says: Payment Security

Apple Pay claims that it provides “more security” for mobile payments via iPhone, offering a device account number and “transaction-specific dynamic security codes” to ensure that no fraudulent transactions can take place.

Why Asia Is Ahead

Founded in 2000, AsiaPay has partnered with China UnionPay, Alipay, Visa, MasterCard, and more to provide advanced anti-fraud protection via PayAlert, which employs a number of functions including data encryption and masking, transaction filters, payment behavior analysis, and transaction pattern analysis.

Not only are users afforded device-specific security through careful data management, they also benefit from a universal overview of all payment transactions to identify patterns and prevent fraud from happening in the first place.

Apple Says: Accepted at 220,000 Stores

Stores including Disney, Bloomingdale’s, and McDonald’s have all signed up for Apple Pay, according to their publicity.

Why Asia Is Ahead

When you consider the ubiquity of both NFC-enabled smartphones and contactless payment facilities across Asia, it’s clear that outlets accepting contactless payments number in the millions.

In Singapore it’s part of the mobile ecosystem – all three mobile operators (SingTel, M1, and StarHub) share an NFC infrastructure, and contactless payment provider E-Z link has deals with supermarkets, taxis, and fast-food chains.

China Mobile, the world’s largest mobile operator, and ChinaUnion Pay have launched NFC payments in 14 cities.

And owners of the 10 million NFC-enabled smartphones in South Korea regularly use them to pay for public transport.

Leading the Field

As the rest of the world gets to grips with contactless payments, it is not surprising that the Asian market has already moved on. All the key e-commerce players, including Alibaba, Tencent, and Baidu, and major operators throughout the territory are exploring new ways of using mobile to make transactions easier, whether through peer-to-peer payments, in-app shopping, or in-store collaborations.

Just last month, Tencent and Baidu signed a joint deal with major leisure group Wanda to allow customers to use WeChat payments in their outlets. While the West plays catch-up, Asia continues to lead the way.

Image via Shutterstock.

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