Apple Opens its App Store to 4.5 Billion Chinese Credit Cards

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This story originally appeared on Fortune Magazine

It’s a pretty safe bet that nearly every Chinese iPhone owner — and there could be a couple hundred million — also has a UnionPay credit or debit card. China UnionPay isn’t just the biggest bank card company in China, it’s the only Chinese bank card, with more than 4.5 billion cards issued worldwide.

On Monday morning (Beijing time), Apple announced that it had struck a deal that will make it easier for UnionPay card holders to buy goods and services on Apple’s App Store in China — the company’s second largest market for app downloads.

Rather than clicking through a cumbersome three-step process — selecting a bank, setting up an online password, and depositing a minimum of roughly $8 in a prepaid account — just to buy an app, Chinese customers can now link their Apple ID with their UnionPay card for what Apple describes as “one-tap purchases.” Apple already has hundreds of millions of credit card numbers on file. This deal gives it access to an addressable market measured in billions.

What Apple’s press release didn’t say is whether Apple Pay will be accepted at the QuickPay kiosks UnionPay has been deploying in thousands of Chinese cities and town.

A rumor that an Apple Pay/UnionPay deal had been struck surfaced on China’s Caixon Online on Sept. 11, two days after Apple’s friction-free payment system was unveiled.

So far, only the iPhone 6 and iPhone 6 Plus, with their built-in NFC transmitters, will work with Apple Pay. But those devices are selling like hot steamed buns in Beijing. Chinese demand for the iPhone 6 Plus in particular is so high in that even today, more than three months after it was released, Chinese resellers are lining up every morning outside Apple Stores in U.S. cities to buy that day’s supply.

You can almost feel Tim Cook’s China strategy falling into place.

Correction: An earlier version of this article incorrectly referred to the number of UnionPay cardholders. There have been 4.5 billion cards issued.

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