Uber’s partnership with Alipay goes global

By Kate Conger for Techcrunch.com

Uber today expanded its partnership with Alipay, a Chinese payment app owned by Alibaba that boasts 450 million active users. The partnership will allow Chinese travelers to pay their Uber fares using Alipay in any of the 68 countries where Uber does business, and allow riders to hail Uber cars directly from the Alipay app.

Uber China’s collaboration with Alipay has grown steadily over the past few years, with plans for this global expansion first announced in January. Alipay has been an accepted method of payment for Uber rides on the Chinese mainland since 2014, and Uber began accepting Alipay in Hong Kong, Macau, and Taiwan earlier this year.

“This is one of the most important partnerships Uber has ever done,” said Emil Michael, senior vice president of business at Uber, calling Alipay “the most innovative payment company that really exists in the world.”

Processing Alipay payments has been a crucial component of Uber’s explosive growth in China, where the ride-sharing company went from just one percent of the market in early 2015 to roughly 33 percent by the end of that year. Many Chinese consumers don’t use credit cards but instead rely on their Alipay accounts as their primary payment method. With Uber’s global expansion of its Alipay partnership, Chinese riders can continue to pay through Alipay wherever they are instead of obtaining a dual-currency credit card.

Because of Chinese consumers’ reliance on Alipay, “It was very important and very natural for us to extend our partnership with Alipay globally,” said Zhen Liu, Uber China’s senior vice president of corporate strategy.

Liu said that the need for an expanded partnership between Alipay and Uber was illustrated during Chinese New Year. Uber recorded a tenfold increase in the number of rides Chinese Uber passengers took in other markets between Chinese New Year 2015 and 2016.

Under the new partnership, Chinese travelers abroad will automatically see the Uber icon inside their Alipay wallet and will be able to hail and pay for rides directly from Alipay. When they return home,this option will vanish and users will need to return to the Uber app to order a car.

In India, Uber will leverage Alipay’s existing relationship with the Indian payment platform Paytm to expand its global reach.

Uber’s Michael declined to discuss the financial terms of the arrangement, saying only that Alipay typically takes a cut of its users’ transactions and this deal would be no different. “The only thing unique about this is, Alipay went from taking payments in 15 countries to 68 countries, so it’s really the scope,” Michael said.

This post has been updated to correct the year Uber China saw a tenfold increase in rides during Chinese New Year. The increase occurred between 2015 and 2016, not 2014 and 2015 as previously stated.