It's likely only a matter of time before Apple Pay arrives in China, but when it does the mobile payment service may face steep competition from a homegrown alternative. Reuters reports that two local giants, Xiaomi and Alibaba, have announced plans to develop a new payment system.

Xiaomi will provide the physical product with its affordable Mi Band fitness tracker, while Alibaba's popular AliPay service will take care of the financial transactions. The result could be a seamless payment system that doesn't require a password to work. The same service is also headed to smartphones through the AliPay Wallet app, starting with Android before expanding to iPhones as well.

It sounds similar to Apple Pay, though Alibaba and Xiaomi's solution won't rely on NFC technology. Late last year, Alibaba hinted it was working with Cupertino to launch Apple Pay in China. It's unclear if today's news means that deal is off the table, though at the very least this will complicate Cupertino's own mobile payment plans in the country.