Apple Could Turn to Alibaba for Apple Pay in China

An Alibaba executive claimed on Tuesday that his company was in discussions with Apple about cooperating on a mobile payment solution for the Chinese market, according to The Wall Street Journal. Alibaba Executive Vice Chairman Joseph Tsai said in an interview that the two companies were talking without claiming they were close to a deal.

“Right now, I think what we can say is that this is focused on the China market for Apple,” Mr. Tsai said in an interview. “We are positive about the potential cooperation, but it depends on the details being worked out.”

Alibaba is an ecommerce site spanning multiple industries, including B2B commerce, online retailing, auctions, messaging (the company owns Weibo), and various and sundry others. The company has a market cap of US$300 billion, and it's taken very seriously in the business world.

As is always the case when listening to things that Apple's supply chain, partners, or would-be partners say, understanding the actual context of what Apple is doing is sketchy. For instance, Apple could be talking to Alibaba about being partners in developing Apple's infrastructure, partners in managing Apple Pay in China (I find this doubtful), or something more lower down the food chain.

Alibaba has its own electronic payment business in China, and it also owns Alipay, a sort of online wallet. Apple could be looking to bring Alibaba's wallet service onboard with Apple Pay like any other credit card provider.

Apple has shown a willingness to think differently about doing business in China, and it's possible the company would need a local partner to offer Apple Pay in China. Either way, even Alibaba's Joseph Tsai merely said that the two companies were in discussions.