They’ve conquered shops and cafes; now WeChat Pay and Alipay are taking the fight to China’s trains
Tencent’s platform is set to break rival Alipay’s four-year dominance of train ticket purchases as the battle moves to a new arena
The turf war between China’s two biggest mobile payments providers has moved to a new frontier: trains.
From November, passengers will be able to buy their train tickets using WeChat Pay on the official booking website, 12306.cn and its mobile app, according to China Railway, the national operator.
The move breaks the four-year dominance of Alipay over mobile payments in China’s multibillion-dollar train ticket booking market.
China Railway said the addition of WeChat Pay will “further diversify payment methods for train ticket purchases".
WeChat Pay is owned by Hong Kong-listed Tencent Holdings, the world's largest video games company by revenue and currently, Asia's most valuable company.
Alipay is a unit of financial technology powerhouse Ant Financial Services Group, an affiliate of Alibaba Group Holding. New York-traded e-commerce giant Alibaba owns the South China Morning Post.
The stakes are high for the mobile payment service that attracts the most bookings: official data shows the country’s railways carried 2.81 billion passengers in 2016, up 11 per cent from the previous year.
Alipay has been accepted on China’s main train ticket sales website since 2013. Although many of the nation’s major banks also offer mobile payment services for train tickets, the vast majority of passengers favour Alipay.
China Railway said the addition of WeChat Pay will “further diversify payment methods for train ticket purchases.”
WeChat Pay is a key function in Tencent's WeChat app, known as Weixin in China. WeChat is China's most widely used mobile messaging service that has evolved into the country's largest social network and popular mobile payments platform. The service had 902 million daily active users as of September 30.
In late September, Alipay broke the monopoly of WeChat Pay in Starbucks, the popular coffee chain. All 2,800 of the coffee giant’s Chinese outlets now accept Alipay, after 10 months of only enabling WeChat Pay.
China, the world's second-largest economy, is the global leader in mobile payments, with US$5.5 trillion in transactions last year that were dominated by Alipay and WeChat Pay, according to iResearch.
WeChat Pay and Alipay, which account for 39.5 per cent and 53.7 per cent of the sector, respectively, are competing for every corner of the market in China, from ride-hailing and doctor's appointments to paying restaurant tips and even renting an apartment.
The gap between the two is narrowing fast; Alipay accounted for over 80 per cent of transaction value just three years ago. In recent months, the two main mobile payment rivals have upped the ante by aggressively expanding overseas. WeChat pay is now available in 15 countries and regions for payments in 12 currencies, while Alipay is accepted in more than 100,000 shops in 26 countries across Europe, North America, East Asia, and Southeast Asia.
“China’s [retail] platforms and companies will be more flexible when it comes to payments in the future, and you will see less and less areas monopolised by WeChat Pay or Alipay” said Zhao Ziming, a senior analyst at Pintu Tank in Beijing.