Apple Pay faces hurdles to adoption in China

According to Business Insider, there appear to be three major factors slowing Apple Pay implementation in China. The first factor is allegedly represented by UnionPay, Chinas state-owned card network, which is unwilling to agree to a profit-sharing scheme with Apple Pay. As of now, UnionPay only takes 10% of the transaction fees that merchants pay. If Apple Pay were introduced in China, Apple would require a share of those fees, thus lessening UnionPays take. Apple Pay would require at least a 0.15% share, which is too high for China, according to an unnamed source. UnionPay and Apple began negotiating last year and originally planned to agree to a deal by March 2015.

The second halting factor is constituted by the NFC chip standards, as Apples iPhone 6 uses an NFC chip that does not fully meet Chinas technical standard, PBOC 3.0. This could be a fundamental issue barring Apple Pay from being adopted since this relates to phone hardware.

Finally, the last factor posing obstacles to Apple Pay adoption in China is the data storage issue. Apple would have to open a data center in China that stores all the Apple Pay payment information that originates in China, according to countrys security standards. This serves to help the Chinese government quickly respond to data hacks if they arise. Right now, Apple doesnt store payment data for Apple Pay transactions, so the company likely would be very hesitant to allow the Chinese government to store and possibly control that data.

Apple has also faced regulatory hurdles in the UK, as there are reportedly ongoing arguments between Apple Pay and the UKs banks regarding the extent of personal and financial information Apple will be able to collect from the banks customers.

Nevertheless, on the US front, Apple has recently unveiled that they have received the federal government’s approval, and they will allegedly begin accepting payments starting with September 2015.