Collaboration of Xiaomi and Alibaba in China may threaten Apple Pay

By | April 3, 2015

It is not long before Apple Pay can enter China market, but when it does it would have a competitor waiting for it. Reports suggest the two Chinese giants Xiaomi and Alibaba joined to announce plans to build a new payment system.


Chinese smart phone giant Xiaomi and Ant Financial, an Alibaba associate which holds the popular online Chinese payment service Alipay would enable the Alipay Wallet mobile app to join with Xiaomi’s Mi Band smart fitness bracelet. This would simplify the process of making payments by overcoming the need for passwords. The same service is also worked upon smartphones through the same AliPay Wallet app. The company is working to implement on Android first before expanding to iPhones as well.

Though the working sounds very much similar to Apple Pay, Alibaba and Xiaomi would not depend on NFC technology. Last year there were talks about Alibaba joining hands with Cupertino to introduce Apple Pay in China. It is still vague if the current news means the deal did not pull off, though it would not complicate Cupertino’s own mobile payment launch plans in China.

Apart from making payments wirelessly, the wearable device is aimed to do variety of other implementations too such as opening the hotel room doors or buying cinema tickets. The Chinese start-up Huami, that makes wristband for Xiaomi, claims the device could be connected with many web services and even act as the user’s identity card. The device when partnered with a smart phone app, users need not enter their password to make Alipay payments.

With all these interesting features, the company has not left security measures unnoticed. When ever the payment is made, the Alipay app would identify the wristband to check whether the transaction is approved. The payment data transmitted to verify through Bluetooth would be encrypted to guarantee security. Also, if the wristband is lost, it cannot be paired with another smart phone until its owner deactivates it. This would prevent other people from misusing the band to make payments. However, if the wristband and phone is lost together, anyone can easily make payments as it does not ask for passwords.

Jiang Long, spokesperson of Alipay stated that combining payment and financial potential with the smart wearable would increase the market demand and popularity of wearable device. The firm has made their applications development software and programming interfaces open, so that the developers could work on to connect their wristband with other apps.

It has taken the companies six months after the collaboration to announce their partnership.  Although this may be a small step for upcoming technology to eventually replace wallets, the partnership marks a major leap in China where the possibility has been considered far from reality.