Alibaba, Xiaomi Partner on Wearable Payments Device
Alibaba’s finance division Alipay is partnering with China’s largest domestic smartphone brand, Xiaomi, to create wearable payment devices.
Xiaomi and Ant Financial, an Alibaba affiliate which includes the popular Alipay online payment service will enable the Alipay Wallet mobile app to link with Xiaomi’s Mi Band smart fitness tracker bracelet. That will enable users to smooth the process of making payments, bypassing the need for passwords.
Xiaomi said that the partnership aims to create wearable devices linked to the users’ identity, enabling them to make wireless payments with a wristband as well as perform various functions from opening hotel room doors to purchasing cinema tickets.
Huami, the Chinese start-up which manufactures wristbands for Xiaomi, added that the new device could be connected to many web-based services and act as a user’s identity card.
After connecting Mi Band with their Alipay account, wearers can make payments by placing the wearable device near an Alipay client without needing to enter a password. Acting as the means of ID verification, the wristband connects to the wearer’s phone via Bluetooth when the transaction is being made.
Responding to security concerns, the companies stated that Mi Band will use industry standard encryption to secure payments. Each device has a unique identifier and payments can only be processed only when this pairs with its pre-set Alipay account, so users don’t have to worry about others making unauthorised payments with their Mi Band if it is lost.
Alibaba is China’s biggest electronic commerce (e-commerce) company and at US$25bn its September 2014 initial public offering (IPO) set a global record. Its planned joint development with Xiaomi of mobile payment systems using wearable technology marks a first for China’s major tech firms.