Apple teams up with Tencent in China (AAPL)

WeChat Pay, China’s second most popular mobile wallet, is now a valid payment option in Apple’s mainland China App and Music Stores, according toBank Innovation.

Tencent's offering will be available to iPhone users running iOS 10 or 11. For context, Apple partnered with Alipay, China’s largest mobile wallet, for the same functionality late last year.

For Apple, these partnerships are an acknowledgment of the status quo in China.

Mobile payments are massive.
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And to take advantage, tech companies need to embrace the biggest players.

The move could help Apple, but it’s not going to solve the firm’s biggest China problem. Adding Alipay brought Apple a lift — the firm saw a 12% user increase in iCloud and Music after adding Alipay — which will likely extend when WeChat is offered as well. Unfortunately, that lift won’t extend to in-store payments, where Apple’s proprietary wallet holds just 1% of the market and continues to face low adoption, despite reinvigoration efforts like marketing campaigns and discounts. These deals could be a stepping stone to future partnerships that would enable Alipay and WeChat Pay as payment methods in Apple Pay itself down the line, which could substantially help the wallet by limiting fragmentation. But if not, though Apple could see an uptick in services-based purchases, it’s not going to make a dent in its biggest weakness in the market.

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