China's Digital Wallets Alipay, WePay Warn iPhone Users of Hacks
China's largest payment apps said on Thursday that Apple IDs were used to hack into their customers' accounts to swipe funds.
China's two largest payment apps, Alipay and WePay, shook the world today saying hackers used Apple IDs to break into customers' accounts and steal funds while offering the U.S. smartphone company cooperation in stopping the breach.
Alipay, operated by Ant Financial, an arm of e-commerce giant Alibaba Group Holding Ltd. (NYSE: BABA), said on its social media account Thursday that it contacted Apple Inc. (Nasdaq: AAPL) to help stop the cybercrime. Its rival, digital wallet WePay, operated by Tencent Holdings Ltd. (HKEX: 0700) said it had witnessed the same and was also working with the iPhone maker. The platforms urged users with Apple identities to change their passwords, as well as lower transaction limits.
"Since Apple hasn't resolved this issue, users who've linked their Apple ID to any payments method, including Alipay, WePay or credit cards, may be vulnerable to theft," Alipay said.
In a report, Bloomberg estimated that Ant Financial handles more than half of China's $17 trillion in annual online payments. The company serves more than 800 million users.
WePay is accessible to more than 1 billion users of China's most popular messenger, WeChat.
It's not a first for Apple's business to turn sour in China. On Tuesday, news surfaced that five years ago, the smartphone maker was forced to close its then-only Shenzhen store after a customer fraud scheme resulted in a loss of billions of dollars.
In 2013, Apple's Shenzhen store had to replace or repair thousands of broken iPhones on warranty claims, which turned out to lack valuable components. Thieves bought or stole the devices, removed certain parts for resale, replaced them with fakes, and took them back to the store, as reported by The Information.
In May of that year, Apple received more than 2,000 claims per week, more than any of its other stores. The investigation found that up to 60 percent of warranty repairs in China and Hong Kong were fraudulent. That year, Apple spent $3.7 billion on repairs compared with the anticipated $1.6 billion.
The scope of the crime involving digital wallets is yet undisclosed, and Apple has not issued an official response to the news.