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Samsung Pay hits a crowded market in China

(Agencies) Updated: 2016-03-30 07:21

Samsung Pay hits a crowded market in China

Koh Dong-jin, president of Samsung Electronics' mobile communications business, speaks during a launching ceremony for Galaxy S7 and S7 Edge new smartphones in Seoul, South Korea, March 10, 2016. [Photo/Agencies]

South Korea's Samsung Electronics Co on Tuesday announced the launch of its mobile payment service in China, where it is likely to struggle in an already crowded market that archrival Apple Inc entered nearly six weeks ago.

The world's second-largest economy is also the world's biggest smartphone market, and Samsung Pay has a powerful partner in China-bank card provider UnionPay.

But unlike most other countries, mobile payment systems are already well-established in China, with local providers dominating the market.

As an outsider Samsung will also have to compete with Apple, which launched its own Apple Pay system last month-also in partnership with UnionPay.

The South Korean electronics giant said its service currently supports selected credit and debit cards from nine Chinese banks and is available on its top-end Galaxy smartphones, with midrange models to follow.

Like its California-based rival, Samsung Pay's initial challenge will be securing a foothold in such a competitive marketplace.

China had 359 million online payment users in mid-2015, up almost 18 percent in six months, according to the China Internet Network Information Center. Mobile transactions were valued at some 9.3 trillion yuan ($1.4 trillion) last year, up an annual 57 percent, one industry estimate showed.

The dominant mobile and online payment providers are e-commerce giant Alibaba Group Holding Ltd with nearly three-quarters of the market, followed by Tencent Holdings Ltd-operator of the popular messaging app WeChat-which has some 17 percent, according to Beijing-based BigData Research.

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