Samsung and Alibaba announce that Samsung Pay will work with Alipay
South Korean smartphone giant is desperate to revive its position in the Chinese market — Samsung Electronics Co. agreed with Alibaba Group Holding Ltd.'s financial-services affiliate to cooperate on mobile payments …
Context & Ripple Effects
Samsung has been building toward Chinese mobile payments for months: it signed one of the separate UnionPay agreements with Apple in December 2015, then launched Samsung Pay in China via UnionPay in March 2016. Today's deal with Alibaba adds a second rail — Alipay acceptance — on top of that UnionPay foundation.
The WSJ frames the move explicitly as an attempt to revive Samsung's position in China, where its phones compete with local makers. Payments are the differentiator: pairing with Alipay gives Samsung's wallets reach into the QR-code merchant network that UnionPay-based NFC alone does not cover.
First-order effects
- Samsung Pay users in China gain the ability to transact through Alipay, extending the wallet beyond the UnionPay card terminals its March launch depended on.
- Alibaba gets Alipay pre-integrated into Samsung handsets, a hardware distribution channel it does not have to subsidize or build itself.
Second-order effects
- Apple Pay, which entered China through the same UnionPay agreement but without an Alipay tie-up, now competes against a rival wallet with broader domestic acceptance — pressuring Apple to seek its own local-rail partnership.
- UnionPay's role as the mandatory gateway for foreign wallets weakens: Samsung has shown that a second, direct partnership with a domestic payments giant is available, changing the negotiating dynamic for any future entrant.
Third-order effects
- If the pattern holds, foreign handset makers competing in China will treat integration with domestic payment ecosystems as table stakes rather than a differentiator, shifting the battleground back to hardware and price.
- The deal foreshadows Alibaba's broader strategy of buying payments distribution across markets — visible later in Ant Financial's $200M investment in Korea's Kakao Pay — making Alipay interoperability a lever in multiple national markets at once.
The trend: Mobile wallet competition in China is shifting from exclusive NFC card-rail partnerships toward interoperability with domestic QR ecosystems like Alipay, as foreign device makers trade exclusivity for merchant reach.