Alipay launches fingerprint payment on Huawei phone

Users can make transactions on payment app by swiping their finger

Alipay, the online payment arm of China's e-commerce giant Alibaba, announced on Monday that it has joined forces with telecommunications equipment giant Huawei to offer a service that allows mobile phone users to make payments using their fingerprints as verification.

The service will be applied to Huawei's smartphone Ascend Mate 7, which features a fingerprint sensor and is expected to debut on Thursday in Berlin.

A simple swipe of a user's finger on the phone would enable him to make payments and other transactions via his Alipay accounts, according to a press release jointly posted by Alipay and Huawei on their Sina Weibo accounts on Monday.

The company has also already started a similar service on Samsung's Galaxy S5 smartphone in mid-July.

Alipay said on its Sina Weibo account that other phone models will be considered for being included in its newly launched fingerprint-based authentication system.

Analysts said that fingerprint-based payment appears to be something that Alipay expects to bank on to offset the negative effect of the government's temporary ban on QR (quick response) code payment service in March.

The ban slowed the further expansion of Alipay's as well as its rivals' mobile payment business, therefore companies like Alipay are tying to figure out other ways of increasing their users, Zhang Yi, CEO of Shenzhen-based iiMedia Research, told the Global Times on Monday.

In March, China's central bank, People's Bank of China, halted code scanning payments because it said QR code scanning is closely linked to consumers' personal information and assets security.

China's overall mobile payment transaction volume in the second quarter saw a slight rise of 0.2 percent from the first quarter, while the growth rate for the first quarter was 110.5 percent, according to a report issued by Beijing-based market research firm Analysys International in early August.

"The ban will be lifted sooner or later, but before that, fingerprint scanning, which is safer and more convenient than password verification, could facilitate the development of Alipay's mobile payment operation," Wang Weidong, an industry analyst with iResearch, another Beijing-based market research firm, told the Global Times on Monday.

Li Xiaolong, vice president of Huawei's mobile phone business, said in the joint press release that a specific type of technology will be used to prevent third-party apps from being able to read users' fingerprints.

Fingerprint payment is widely believed to be a promising step in mobile Internet with handset makers including Apple and Samsung as well as brick-and-mortar banks in China exploring its commercial use.

Meanwhile, Internet mammoth Tencent also reportedly plans to integrate the fingerprint payment service into its most popular instant messaging app WeChat, signifying a potential threat to Alipay in the sector.

Zhang said that Alipay has already been confronted with many challenges from WeChat, which is ramping up efforts to persuade its large number of active users to pay via WeChat.

While WeChat's monthly active users hit 438 million in the second quarter according to Tencent's financial report, Alipay reportedly has over 100 million active users.

Wang has concerns that Alipay's cooperation with Huawei will not help it stand out in the heated fingerprint payment segment.

He said that if Alipay's fingerprint system could have been installed on Apple's new-generation phone, things would be different because Apple models attract a large number of buyers while not every Huawei handset has such broad appeal.

Both Wang and Zhang noted that fingerprint payment is still new to most consumers, and Alipay would need a lot of time to persuade users to embrace cutting-edge services.