Alibaba says it wants to help Apple Pay launch in China. The e-commerce giant, which owns China's largest payments platform, Alipay, made that clear in an interview with Wall Street Journal.
Alibaba executive vice chairman Joseph Tsai shared his thoughts on what that relationship could look like:
“If people want to use Apple Pay in China, Apple would have certain restrictions and limitations on operating payment businesses in China,” Tsai told the Wall Street Journal. “So we are thinking whether there is any opportunity for us to work together where Apple Pay and Alipay can somehow work together in China.”
This comes just weeks after Alibaba raised $25 billion during its September IPO and saw record breaking sales earlier this month from massive spending during China’s annual shopping event, Singles’ Day.
A partnership between Apple and Alibaba was highly rumored after Apple CEO Tim Cook and Alibaba's Jack Ma expressed interest in such a relationship in October during the WSJ.D conference in Laguna Beach, California. And now the companies are in talks for such a relationship. But bringing in Apple Pay is not without its own set of difficulties.
Alibaba’s financial arm and operator of Alipay, Ant Financial, is involved in the talks, Tsai said.
One way the partnership Apple Pay could work is if Alipay provides the payment network and back end, which Tsai indicated is the “obvious possibility,” though the companies would also have to work with retailers to ensure the proper equipment was installed to accept Apple Pay.
Regardless of whether Apple can strike a deal with Alibaba, it will still need to clear a number of regulatory hurdles. Foreign payment processors such as Visa and American Express have had difficulty in the country due to licensing rules and laws, leaving China UnionPay with a virtual monopoly on credit card issuing and processing.
"Right now, I think what we can say is that this is focused on the China market for Apple," Tsai told the Wall Street Journal. "We are positive about the potential cooperation, but it depends on the details being worked out."