California-based tech giant Apple Inc. has reached an agreement with China's only credit-card processing company to launch the Apple Pay smartphone-based payment system in China.

ABC News reports that Apple Inc. and China UnionPay has announced that they are launching the payment system early in 2016 once it gets approved by regulators.

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Bloomberg reports that with the agreement, state-owned China UnionPay will be able to add their bank cards to mobile Apple devices such as iPhones, iPads, and Apple Watches so that users will be able to use the feature.

Should it be approved for launch, it will be just in time for the Lunar New Year which begins Feb. 8. This is China's biggest shopping season.

Apple Pay's foray into the Chinese electronic payments market is quite late and will face some strong competition. Alipay, which belongs to ecommerce giant Alibaba Group, as well as internet titan Tencent's Tenpay have already built strong consumer bases in China.

In 2014, Alipay has held about 80 percent of the Chinese third-party electronic payments market. Tenpay, on the other hand, held about 10 percent. And with Apple Pay's rate considered too expensive for Chinese merchants according to Caixin, the competition might even be harder.

“Alipay remains the industry’s dominant player, which Apple Pay would find difficult to surpass in the near future,” Forrester Research analyst Di Jin told Bloomberg.

Although competition might be strong inside the electronic payments market, Apple still considers China as a valuable market for investment.

“China is an extremely important market for Apple,” explained Apple's senior vice president of Internet software and Services Eddy Cue.“

Korean tech giant Samsung has also reportedly reached a separate agreement with China UnionPay, and will give similar mobile payments convenience to Samsung Galaxy and Galaxy Note device users.

TagsChina UnionPay, Apple China, Chinese electronic payment, Samsung Pay, Samsung Pay China