Alibaba’s finance arm and smartphone maker Xiaomi said on Thursday they will jointly develop mobile payment systems using wearable technology, which is the first for China’s major tech firms. More specifically, Xiaomi will enable Alibaba’s Alipay Wallet (China’s most popular online payment service) mobile app to link with Xiaomi’s Mi Band smart fitness bracelet, which will let users smooth the process of making payments, bypassing the need for passwords. The Alipay-Mi Band link will be made available on the current version of Alipay Wallet for Google’s Android mobile operating system. The next version will be compatible with Apple’s iOS.
The encrypted link will avoid potential security pitfalls of near-field communications (NFC) wireless technology, which has been criticized for potential vulnerability to theft and cyber attacks. Apple will use NFC to allow users to make payments on its Apple Watch, which is to be released this month, rather than on a phone.
Despite being a small step for an emergent technology tipped to eventually replace wallets, the partnership marks a milestone in China as it may increase consumer spending significantly. As reported by Mobile World Live, in the first 10 months of last year, Alipay handled more than half of all transactions through mobile phones.