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By Stella Yifan Xie in Hong Kong and Yoko Kubota in Beijing
China's two mobile-payments giants said stolen Apple IDs were used to swipe customer funds, and called on Apple Inc. to address the issue.
Alipay, the payments affiliate of e-commerce giant Alibaba Group Holding Ltd., in recent days posted an online notice warning iPhone users, and saying some customers had lost money as a result.
Alipay said it has asked Apple "multiple times" to pinpoint how the thefts occurred, and that the Cupertino, Calif.-based company replied it is looking into the matter.
An Apple ID refers to the account used to access Apple services such as its App Store and iCloud. It includes information such as the user's email address, password and payment details, according to Apple's website.
Some Chinese iPhone users complained in recent days that they received mobile notifications of App Store spending they didn't authorize, according to state media China National Radio. Complaints on social media claim losses amounting in some cases to hundreds of U.S. dollars, with text-message notifications at odd hours.
Alipay's notice didn't say how many people had been affected, but said they did include iPhone users who connect their accounts to other payment systems, including its main rival WeChat Pay as well as credit cards. A spokeswoman for WeChat Pay, owned by Tencent Holdings Ltd., said it didn't issue a notice to users, but a company statement to the media echoed Alipay.
Both Alipay and WeChat Pay hold billions of dollars of customer funds in escrow to facilitate mobile and online transactions.
An Apple spokeswoman pointed to instructions on its website for protecting Apple IDs against fraud--such as two-factor authentication, a setting that requires users logging in to verify their identity with a second code in addition to a password.
Alipay's online notice warned customers are "exposed to risks of financial loss" until Apple resolves the issue, and said they could minimize losses by reducing the amount that can be transferred without entering a password. It also included Apple's China customer-service number.
The brouhaha has emerged during a week when Apple CEO Tim Cook is in China meeting with employees, government officials and others.
Alipay, owned by fintech giant Ant Financial Services Group, is China's largest mobile-payments system by transaction volume, slightly ahead of WeChat Pay. Alipay had 700 million users as of August; WeChat Pay, more than 800 million users as of June.
Between them they handled nearly $15 trillion in mobile transactions in China last year, according to data firms iResearch and Analysys. Both systems are widely used for everyday services like bus and taxi rides, meals and online shopping, utility bills and even to invest in mutual funds.
Some consumers in China prefer Apple devices--including the iPhone--and services over those of its Chinese rivals running on Android because they consider the company's privacy protections tighter.
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(END) Dow Jones Newswires
October 11, 2018 08:58 ET (12:58 GMT)
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