The launch of Apple Pay in China, originally expected to be part of iOS 8.3, has been delayed by stalled negotiations with both the state-owned card processor UnionPay and Chinese banks, reports MarketWatch. Developers had originally been told that iOS 8.3 would support UnionPay, but found that support was missing when the update rolled out last week.
The banks are reportedly unhappy about the cut Apple takes from each transaction …
A UnionPay employee who declined to be named said the company has not reached any agreements with the U.S. tech company, and no timetable for cooperation has been set […]
Those sources also say Apple has not made any breakthroughs in talks with Chinese banks, which would also have to agree for the Apple Pay system to work.
In the U.S., card processors typically charge 2% for each credit card transaction, and Apple takes 0.15% from that slice. While the percentage is small, high transaction volumes mean that the total sums involved are substantial.
While Apple could begin the Chinese rollout with a limited number of banks, it cannot do so without UnionPay as the payment processor has a monopoly on card processing in the country.
Chinese banks argued those charges were too steep, an employee of a large bank said. Many large banks that are already part of mature point-of-sale networks do not want to lose such a large percentage of their profits in a deal with Apple Pay, he said.
There have been reports that Apple has hit similar issues with UK banks, meaning that Apple Pay will not launch in the UK in the first half of the year as had been widely expected.
The rollout of Apple Pay in the U.S. continues, with more than 180 banks and other financial institutions on board, and the payment method accepted at a total of 68 merchants.
