China: Huawei stirs up mobile payments competition with Huawei Pay

When Huawei first launched the payment service in September on a pilot basis, it could only be used at a limited number of shops and restaurants. But now that the testing phase is over, the company says it will work with UnionPay to expand Huawei Pay across China to a larger number of Huawei handset users.

Huawei’s latest move will likely intensify the already stiff competition in China’s mobile-payment market, where Apple Pay is going up against local competitors. Alipay, an electronic-payment service affiliated with online shopping company Alibaba Group, dominates China’s mobile-payment market with a 70% market share in the third quarter, followed by a rival service operated by social-network company Tencent, which accounted for 19%, according to research firm iResearch.

Users of Huawei smartphones equipped with a fingerprint sensor as well as data-transmission technology called near-field communication can download a Huawei Pay app to use the service, according to the company.

Every payment made with Huawei Pay requires a fingerprint scan to make the transaction more secure, the company said. Some of Huawei’s existing phones already come with NFC and fingerprint sensors, and the number of such phones is expected to increase.

Major technology companies are locked in a fierce battle to secure their positions in China’s fast-growing mobile-payments market. In the third quarter of 2015, China’s mobile-payment transactions jumped 64% from a year earlier to 2.42 trillion yuan (USD373.2 billion), according to iResearch.

China has 620 million mobile Internet users, and the number of people using mobile payments increased more than 60% in 2015 to 357 million, according to the state-backed China Internet Network Information Center.

For the past few years, Huawei has been increasing its presence as a smartphone maker not only in China but in the global market. In China, Huawei was the biggest smartphone vendor in the fourth quarter, with a 15.2% market share, followed closely by Apple’s 14.6% and Chinese competitor Xiaomi`s 14.4%, according to research company IDC.