Apple struggling to close a deal in China for Apple Pay

Apple Pay appears headed to China. The release of the first beta version of iOS 8.3 had Apple Pay support for China UnionPay. But don't count on the mobile payment system creating a stir in the country just yet. An official with the People’s Bank of China says that Apple has yet to approach regulators in China about allowing financial institutions in the country to participate in the program. Because Apple has yet to seek out regulatory approval, this official says "it's unclear whether the product meets the government's requirements."

Despite the iOS 8.3 beta 1 support for UnionPay, which is the government run debit and credit card operator, Apple's relationship with the outfit is not as close as it would seem to be. Talks between Apple and UnionPay have hit a rough patch. Like Apple Pay, UnionPay relies on NFC for its mobile payment system in China, which works with a smartphone loaded with a special China Mobile SIM card. Regulators have steered clear of the negotiations between Apple and UnionPay, which both had hoped would be finished by March. The company has the only NFC payments network in China.

Apple could decide to strike a deal in China with Alibaba's Alipay app. The latter uses a QR code and a fingerprint password developed by Alibaba and Apple to make a payment. Alipay still uses UnionPay's NFC network to complete a transaction. No matter how it is done, Apple Pay is destined to get into China as the mobile payment system expands from the U.S. to Canada and beyond.

source: MarketWatch via MacRumors