Alipay steps up global expansion with major move into North America
China’s largest online payments platform partners with credit card processing service First Data Corp to support mobile payments in stores for more than four million annual mainland visitors to the US and Canada
Alipay, China’s biggest online payments platform, is stepping up its global expansion with a major foray into North America, taking on PayPal and ApplePay in their home market.
Hangzhou-based Alipay has partnered with US credit card processing service First Data Corp to support mobile payments in four million merchants and retailers across the world’s largest consumer market, according to a joint statement by the two companies early on Tuesday.
“Our goal is to extend reliable payment services to the over four million Chinese consumers who visit North America every year,” said Souheil Badran, the president at Alipay North America.
The announcement followed news on Monday that Tencent Holdings has partnered with Citcon, a mobile payments start-up in California’s Silicon Valley, to expand the use of its WeChat Pay platform to support Chinese tourists in the US. Alipay was first to collaborate with Citcon in February this year.
First Data and Alipay initially cooperated last year, when the two companies successfully tested implementation of Alipay’s mobile payment service in select high-end and specialty retail locations in California and New York.
“These developments reflect the rise of Chinese finance platforms,” said Paul Haswell, a partner at international law firm Pinsent Masons.
“While their recent moves are aimed squarely at Chinese tourists, you can be sure that both Tencent and Alibaba have their sights set on offering payment and financial services, in general, to non-Chinese consumers in North America,” Haswell said. “It is such a huge market, and the success of services like ApplePay show that the public is keen to embrace new payment facilitators where they offer increased convenience.”
The extensive roll-out of Alipay, a unit of Ant Financial Services Group, across the US and Canada will initially cover First Data’s network of clients that use its Clover point-of-sale terminal for small- and medium-sized businesses.
Ant Financial is an affiliate of New York-listed e-commerce giant Alibaba Group, which owns the South China Morning Post.
“Through this agreement, we will be able to offer our unparalleled network of business clients a cutting-edge payment solution,” said Frank Bisignano, the chairman and chief executive at First Data.
Alipay has estimated that it has already more than 450 million total active users, which augurs well for the vast network of merchants in North America supported by First Data.
In addition to online payments and money transfers, Alipay users can hail a taxi, book a hotel, buy movie tickets and make doctors’ appointments directly from within its mobile app.
Alipay has recently been expanding to in-store, offline payments at bricks-and-mortar retailers across the globe. It said the First Data relationship will provide more North American merchants and retailers the ability to accept payments from millions of overseas customers who already know and trust the platform.
Haswell pointed out that “any perceived growth in Alipay internationally is going to build positive interest in Ant Financial and in turn, benefit its anticipated initial public offering”.
Ant Financial is widely speculated to be gearing up for a public listing later this year. The company was valued at US$75 billion by brokerage firm CLSA in September, following its US$4.5 billion fundraising round in April last year.
As part of its agreement with First Data, Alipay transactions will be routed through Acculynk, a technology company that was recently bought by First Data. Acculynk will tokenise the Alipay QR code for settlement.
“With the help of Acculynk’s gateway technology, First Data will be able to quickly implement Alipay for its large client base, so businesses can start accepting Alipay transactions in a seamless manner,” said Ashish Bahl, the founder and chief executive of Acculynk.
“Through its role as the world’s largest merchant acquirer, First Data will be the first to offer Alipay at the point-of-sale in a scalable manner for North America businesses.”