By Sheila Yu for TechNode
Alipay recently announced a partnership with America’s First Data Corp, in its latest efforts to expand its presence in overseas mobile payment market.
The deal with the American payment processing services will allow 4 million merchants in the U.S. to accept Alipay, a boon for Alipay users shopping there.
The partnership comes after Ant Financial’s ongoing acquisition of U.S. money-transfer service MoneyGram, valued at US$ 1.2 billion, was unanimously given the go-ahead by the American firm’s board last month.
“This will open up Alipay to where it’s truly ubiquitous across the United States and hopefully more countries later,” said Souheil Badran, president of Alipay’s North America operations. Alipay has been accepted by more than 100,000 retailers in more than 70 overseas markets, he added.
According to Douglas Feagin, head of Ant Financial’s International Operations, the company has over 450 million registered users as of last October, one-tenth of whom were outside of China. If taking into account the 150 million users of Paytm, its strategic partner in India, Ant Financial has had nearly 200 million overseas users.
Alipay remained the market leader in China’s third-party online payment market with a 54.1% share in Q4 2016. They are trailed by Tencent’s mobile payment service Tenpay (财付通 in Chinese) at 37.02%, a report by Chinese market research service Analysys revealed. (Tenpay encompasses both WeChat Pay and QQ Wallet).
Alipay and its old enemy WeChat Pay have been engaged in an expansion tug of war, both trying to replicate and create their success in mobile payment outside their home turf.
Alipay partnered with Emtek to expand into Indonesia’s mobile payment last month. In addition, the payment service announced in February a US$ 200 million investment in South Korea’s Kakao Pay, and also clinched deals with Philippines’ fintech service Mynt and Thailand’s payment firm Ascend Money.
WeChat Pay, on the other hand, made a recent expansion move by taking its payment service to the US through a tie-up with Silicon Valley-based mobile payment startup CITCON (that also works with Alipay), to allow its WeChat users in the U.S to. enjoy the same cashless payment experiences as they do in China. WeChat Pay can now be used in 15 countries and regions for payment in 12 currencies.
As an ever increasing number of Chinese consumers binge on overseas spending, more and more merchants, sniffing out enormous business opportunities, have been catering to Chinese travelers with Chinese mobile payment.
Yet mobile payments are not as popular in the U.S. as in China, as Americans are still used to paying with plastic. The disparity in payment habit may pose a challenge to Chinese mobile payment services and raise roadblocks to their expansion.
According to Forrester Research, mobile payments in the US hit US$112 billion. This figure pales in front of its Chinese counterpart. A recent report from iResearch shows that China’s mobile payments amounted to a staggering US$5.5 trillion last year.