Xiaomi Inc., the smartphone maker and Alibaba Group Holding Ltd (NYSE:BABA)’s finance arm have decided to jointly develop a mobile payment system using wearable technology. The move will be the first for a Chinese tech company. Alibaba owns the popular online payment service Alipay.
Xiaomi and Ant Financial, an affiliate of Alibaba will enable the Alipay Wallet mobile app to link, with Xiaomi’s Mi Band smart fitness bracelet. The move will allow making and receiving payments without the need of passwords.
The technology aims to eventually replace wallet as biometric bracelet would be used to make payments. The partnership marks a step towards the goal ofmaking wallets redundant.
In related news, Apple Pay will be arriving in China soon. The move by Alibaba and Xiaomi could, therefore, be seen as a pre-emptive measure to counter Apple pay.
XIaomi provides the physical product, with its wrist band fitness tracker while Alibaba’s Alipay will take care of the transactions. The result would theoretically make payments seamless without the need for any password.
The partnership is not limited to bracelet; Xiaomi’s mobiles will also be compatible, with smartphones. The tech sounds similar to Apple Pay. However, Xiaomi and Apple would not be relying on NFC tech.
Last year, Alibaba had hinted that it would work, with Cupertino to launch Apple Pay in China. It is unknown whether that will happen now, given that Alibaba has teamed up, with Xiaomi now. However, move by Alibaba will at least complicate mobile payment plans of Cupertino in China.
The Alipay-Mi Band link will be available on the current version of Alipay Wallet for Google’s Android mobile systems that run on mobiles including Xiaomi. The next version of the e-wallet will be available, with Apple’s iOS.
An encrypted link will avoid the potential security hazards. However, the technology has been criticised for potential vulnerability and threat of cyber-attacks.
DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of USmarketsDaily.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: