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Apple Inc is set to launch its Apple Pay mobile-payment system in China by February, in time for the Lunar New Year, and is said to have reached a deal with UnionPay.
Experts said that, pending regulatory approval, the service should be successful in the long run in China.
The iPhone maker has made deals with four of China's banks, according to The Wall Street Journal, which will allow users to link their bank accounts with the service.
On Wednesday, it was reported that Apple reached a preliminary deal to introduce the mobile-payment system through UnionPay's point-of-sales network, Bloomberg reported.
The service allows iPhone 6 and 6s users to tap their smartphones at a store counter to pay for goods. Apple makes money off the service by taking a percentage of the transactions; in the US, the company gets 0.15 percent of credit card transactions and a half cent for debit card transactions.
Greg Portell, partner at AT Kearney's consumer products and retail practices, told China Daily that it is "hard to envision a scenario where they don't become successful", even though expectations for Apple are high.
"In the end, Apple has key advantages which suggest they will have a viable mobile solution. The combination of an installed base, financial capability to sustain investments and a proven record of partnership is powerful," he said.
Jan Dawson, chief analyst at Jackdaw Research, echoed Portell's comments, saying that the Chinese financial system is different from the US and other markets where Apple Pay is available, but "the iPhone has also clearly become very popular in China, and as such, a payment mechanism that's integrated into the phone would be a big step forward, and as long as it works with Union Pay and other major systems, then it should be pretty successful."
The biggest chunk of Apple's business comes from iPhone sales; its sales in Greater China, which includes Hong Kong and Taiwan, increased nearly 90 percent in the quarter that ended on Sept 26.
Apple CEO Tim Cook has said repeatedly that the Cupertino, California-based company is very invested in expanding in China, and previously told Xinhua that the company "very much" wants to get Apple Pay into the country.
"I'm very bullish on Apple Pay in China," Cook said.
If the payment system does launch in China, it will face competition from Alipay — a similar payment platform run by an Alibaba affiliate group Ant Financial — which dominates the Chinese third-party payment market, and UnionPay, China's payment-card operator.
Apple's reputation as a luxury brand could be a hindrance, according to Patrick Moorhead, president and principal analyst with Moor Insights & Strategy.
"Apple Pay, long term, will [do] well in terms of RMB of transactions, but given that Apple is a bit of a luxury brand, others will lead in the number of transactions. This is, of course, unless it provides a lower-priced smartphone to the China market," he said.
The payment system could see consumer and retail traction in East China, in major consumer hubs like Beijing and Shanghai, but Apple's biggest challenge "will be to get traction in Central and Western China," Moor said. In order to achieve this, Apple will need to find a way to address the large number of Chinese consumers who don't have iPhones, he said.
