Just when we thought the payments game is now saturated enough to not be welcoming to new players…
Huawei has announced their own mobile payment service in China, named Huawei Pay. Huawei Technologies Co. Ltd. is China’s phone manufacturer giant. The service is currently already installed in Huawei Mate S last December, and will be rolled out in subsequent Huawei .
Huawei has entered into a partnership with the Bank of China (BOC) for this initiative, hence, holders of BOC cards will be able to use Huawei Pay to begin with. Similar to most other mobile payment services, Huawei Pay will use near field communication (NFC) to enable payments through their smartphones.
During the launch, Huawei did not specify the specifics of their mobile payments system as of now. They mentioned that while they are searching for other partners, especially banks and financial institutions, Bank of China remains their only partner for now.
According to a research conducted by Gartner, shockingly or not, Huawei is actually the third largest smartphone vendor in terms of market share, falling behind Samsung and Apple in 3Q15. Globally, in 2015, Samsung has taken a plunge while Apple and Huawei made some gains.
In 2015, Huawei exceeded $20 billion in revenue, which was an increase of nearly 70% from the year before. They have also hit the milestone of 108 million smartphones shipped in 2015, the first Chinese smartphone manufacturer to exceed 100 million shipments.
Similarly to Apple Pay’s initial collaboration with the ICBC and Union Pay when entering China, Huawei Pay has also launched their service by announcing a partnership with BOC.
We do believe that initial partnerships with existing financial institutions will be able to give some weight and credibility to these mobile payment services.
While other mobile payment services are trying to tap into China’s 1.38 billion population, it may be slightly more challenging to engrain into them products and services from foreign manufacturers and companies. Huawei launching their own service may come as a competitive edge in their own home ground.
Nonetheless, there are multiple other payments-related competitors in China, including big tech giants such as WeChat, Alipay and Tencent. Will Huawei Pay be able to remain it’s competitiveness with the presence of these existing payment services or should they carve out their own niche in possibly commanding a higher market share going forward?