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Apple continues on its struggled journey to launch Apple Pay in China after talks with both UnionPay and a selection of Chinese banks continue without deals being sealed.

According to the MarketWatch report, Apple is still not in a position to launch the service in the region with backing from the banks and China's credit and debit card system operator, with previously announced support scheduled to arrive with iOS 8.3 not materializing:

"Apple started talks with UnionPay about using its network last year and hoped that by March it would have an agreement in place that would allow consumers to make payments via their iPhones. But the U.S. tech company is still struggling in its relationship with UnionPay, people close to the talks say. Those sources also say Apple has not made any breakthroughs in talks with Chinese banks, which would also have to agree for the Apple Pay system to work."

It's a major setback for the American company, which requires both Chinese banks and UnionPay to be on-board to offer Apple Pay to consumers in the region. It's believed the reasoning behind the breakdowns and stalls in discussions between the parties involved comes down to Apple Pay fees.

"In the United States, Apple Pay says it gets 0.15% of the 2% fee paid by merchants for each credit-card payment and half a penny for each debit card payment. But Chinese banks argued those charges were too steep, an employee of a large bank said. Many large banks that are already part of mature point-of-sale networks do not want to lose such a large percentage of their profits in a deal with Apple Pay, he said."

Apple is aware of the importance of China, particularly for Apple Pay. Tim Cook previously confirmed that Apple was planning to launch new services in the market, but the company had to understand how the payment system works in China. This is reportedly proving somewhat troublesome as banks and UnionPay continue to disagree on how Apple Pay would be implemented.

Source: MarketWatch