BEIJING, China—As if the complexity of mobile wallet offerings in the wake of Apple Pay and Samsung Pay weren’t enough, there’s a new wrinkle in e-wallets that is likely on its way to the U.S.: an e-wallet account that pays interest.
While now available in China only, analysts are predicting such an offering will be in the American market within three-to-five years.
Chinese phone giant Xiaomi has introduced a beta program where its phone users in China can earn an interest rate of 3.058% on money transferred from their bank accounts to their Xiaomi mobile wallets, reports re/code.
A handful of financial institutions have partnered with Xiaomi on its test of an interest-bearing, money-market-like fund. The intent, according to the phone maker, is not to get into the banking business, but instead provide the mobile wallet as a service to its customers.
Xiaomi marketing executive Tony Wei told re/code the product is similar to an online money market fund offered by Chinese e-commerce giant Alibaba Group.
No Similarities To Apple Pay
Bill Hardekopf
Xiaomi President Bin Lin told re/code that the company doesn’t plan to offer a mobile payments program that is similar to how Apple Pay works. “In China, it isn’t consumer behavior to pay with a phone swiping yet,” Lin said.
Xiaomi does not have a presence in the U.S., but Lin predicting that the first breakthrough Chinese product would reach America within three to five years, suggesting it would be the Xiaomi’s big-screen smartphone, the Mi Note, re/code reported.
re/code added that Xiaomi won’t be headed to the U.S. anytime soon, as it lacks the call-center support infrastructure needed to assist customers who purchase its devices online.
“I think Xiaomi is trying to differentiate from all other mobile wallets,” said Bill Hardekopf, CEO of LowCards.com in Birmingham, Ala. “Apple started all of the buzz, and others have soon followed. Now you have a player in the mobile payments market saying I will pay you interest. It’s fascinating.”