Apple to Penetrate the Overseas Market for Online Payment
Tech Giants Adopt Strategies to Overcome Rivals
Growth sluggish outside the United Kingdom
Apple Pay’s growth remained sluggish in the United States after its debut in 2014. Since then, Apple has been trying to penetrate the payment market overseas, where people are more interested in making “contactless” payments. This is a service that allows iPhone users to pay through a mobile app or by tapping their iPhone at retail stores. Apple is planning to introduce Apple Pay to China, Hong Kong, Singapore, and Spain.
Apple is seeking to be a “recognised brand” outside of its domestic territory that deploy advanced technologies that are needed to accept Apple Pay in retail outlets. The service was too slow to expand its footprint, primarily due to the lack of store terminals that accept the payment systems. However, its growth has been faster in the United Kingdom as more merchants are willing to deploy contactless payment systems.
Collaboration with UnionPay
Apple recently reported that it was collaborating UnionPay to roll out Apple Pay in China. Moreover, Apple will associate with 15 other banks that include the Bank of China, Bank of Shanghai, and Bank of Guangzhou to support Apple Pay. Apple is also trying to expand to Canada and Australia, where it has a tie-up with American Express. The latter is the only service at the moment because others are reluctant to allow Apple to cover the majority of the pie in the payment sector. Moreover, According to McKinsey & Company, more than 235 million people aged 15 and above don’t have a bank account.
By penetrating China’s payment market, Apple will be competing with Tencent Holdings, WeChat, and Alipay, as they cover approximately 75% of the mobile payment market in China. Moreover, Samsung is trailing behind Apple with its announcement on joining UnionPay to launch its Samsung Pay service by 2016.
The SPDR S&P 500 ETF (SPY) is a portfolio of 507 stocks whose top four stocks are Apple (AAPL), Microsoft (MSFT), ExxonMobil (XOM), and General Electric (GE). They constitute 3.6%, 2.3%, 1.9%, and 1.7%, respectively, of SPY.
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