Alibaba CEO Jack Ma already suggested that his company is interested in partnering up with Apple on mobile payments. The Wall Street Journal has sat down with Alibaba Executive Vice Chairman Joseph Tsai to get more details of the deal.
An alliance between Alibaba and Apple would mean a lot to the latter, because it would help remove the regulatory hurdles that a new financial player would face. Both parties see the huge potential in a partnership: from Alibaba’s perspective it’s important that Apple has sold a lot of iPhones in China, while, for Apple, it’s great to have a partner who could take care of the back-end operation.
In practical terms, when Chinese users pay with their iPhone in-store, the money would come from their Alipay accounts, so the money flow should be smooth, as it doesn’t need Apple to handle the money, only the front-end of the operation.
Tsai: A lot of specific points are being discussed and worked out. Apple has sold a lot of phones in China. If people want to use Apple Pay in China, Apple would have certain restrictions and limitations on operating payment businesses in China. 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. Alipay is part of Ant Financial, so (Ant Financial CEO) Lucy Peng and her business development team are involved in the talks. Right now, I think what we can say is that this is focused on the China market for Apple. We are positive about the potential cooperation, but it depends on the details being worked out.
In the end, the partnership all depends on the details that need to be worked out between Apple and Alibaba. The latter has the license (though its Ant Financial business arm) to operate payment business in China, which means another win for Apple.
The iPhone maker has already launched Apple Pay in China today, and is backed by UnionPay. Apple Pay is currently limited to the App Store, but a partnership with Alibaba would also kick-start mobile payments in stores in the country.