Off the top of your head, what would you guess is the single biggest mobile payment system in the world? PayPal? Square? Maybe Google Wallet?
The answer is Alipay, the mobile payment wallet owned by Chinese e-commerce company Alibaba. In February, Alipay became the single biggest digital payment platform in the world. In 2013, Hong Kong newspaper the Standard reported that Alipay processed nearly $150 billion in mobile transactions, which makes the platform larger than PayPal and Square combined.
So it shouldn’t come as a surprise that Apple has been aggressively pursuing bringing Apple Pay, the Cupertino company’s quick-growing mobile wallet, to China. On Monday, Alibaba executive vice chairman Joseph Tsai told the Wall Street Journal that the two technology giants are discussing a possible partnership that could help Apple Pay go nuclear in China. “We are positive about the potential cooperation,” said Tsai, “but it depends on the details working out.”
How that would work is up in the air, but the Journal speculates that Alipay could provide the back-end for Apple Pay in China, meaning consumers wouldn’t have to move anything out of their existing accounts.
Apple’s fondness for Alibaba (and vice versa) is well documented. Last month, Alibaba founder Jack Ma hinted that the two companies were interested in teaming up to bring Apple Pay to China.
It’s certainly an enormous opportunity. Mobile payment transactions in China have showcased steady growth year-over-year since 2010, as this chart from iResearch illustrates:
Indeed, the Chinese government considers mobile payment technology crucial to domestic growth, and even included it as a touchstone in its 12th Five-Year Plan.