China property giant Wanda partners with UnionPay to expand mobile payment scheme

China’s largest commercial property developer joined hands with the leading payment services provider on Thursday in the latest example of online to offline integration that is reshaping the nation’s retail landscape.

Dalian Wanda Group and credit card provider China Union Pay announced a partnership that will see UnionPay QuickPass, a chip-based contactless payment service, introduced to 187 Wanda Plazas, 51 department stores, 102 hotels, five theme parks and millions of Wanda partner merchants.

The mobile-payment app, together with more innovative payment apps the partners are designing, will provide consumers with promotional information, mutual recognition of reward points and financial support for various online payment scenarios, Wanda said in a statement on Thursday.

Shanghai Lianyin Investment, a subsidiary of UnionPay, will acquire an unspecified stake in Wanda Internet Technology Group, which combines Wanda’s third-party payment unit 99Bill, e-commerce and credit rating units. Wanda chairman Wang Jianlin said in January he wants to raise 10 billion yuan (US$1.45 billion) in first round investment for the group’s e-commerce unit Ffan.com. The fundraising is planned to begin in the third quarter of this year.

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Besides Wanda Group, UnionPay has already expanded the QuickPass service to stores like KFC, McDonald’s, Watsons, Starbucks and FamilyMart. The payment option is also available for many internet-based companies such as Ctrip.

Yin Qi, an executive with UnionPay, told the South China Morning Post, that Wanda’s 99Bill doesn’t compete directly with UnionPay as its one of many members of the UnionPay network that are authorised to deliver the service.

“QuickPass is just the first concrete collaboration. Many more will come up in the coming months,” he said.

The new alliance is the latest in a series of online to offline integration partnerships. Alibaba Group Holdings previously forged a partnership with electronics chain Suning Commerce Group and invested US$2.6 billion in mainland department store chain Intime Retail Group. These alliances have given offline retailers access to data revealing buying habits of consumers, helping them conduct more effective e-commerce promotions.

Alibaba founder Jack Ma has said the concept proves that lines between physical and virtual commerce are becoming obsolete, and that their relationship is not zero-sum game. Alibaba is owner of the South China Morning Post.

However, Wang’s digital ambitions face a number of challenges, first of which is that as a property company its digital DNA is no match for the Chinese internet giants. Wanda’s Ffan.com site is still losing money as it struggles to find a viable business model under its third chief executive since being established three years ago.

Even Wang himself joked on Thursday that outsiders have always seen Wanda as a “vulgar tycoon”that doesn’t know technology.

“But no one in China can claim that they have found a solid model for online-offline integration. In this arena we are at the same starting line,” he said, adding that he would prefer to prove his point by delivering results, not by arguing.