China’s mobile payment giants forcing incumbents to innovate
After dominating the mainland Chinese payment landscape, Alipay and WeChat Pay look to other Asian markets, forcing rivals to play catch-up
Three years ago cash was still king in China – until Alipay and WeChat Pay shook up the entire ecosystem. Today, their dominance in mobile payments for everything from taxi fares to peer-to-peer transfers have not only made them household names in a country of 1.4 billion people, but incumbent payment operators are being forced to innovate or risk being left behind.
China has embraced mobile payments faster than any other country. Last year, mobile payment transactions hit US$5.5 trillion, making China the largest mobile payments market in the world, according to iResearch.
Tencent’s WeChat Pay, together with Ant Financial’s Alipay and its overseas strategic mobile payment partners, claim a total of 600 million and 800 million users respectively.
Combined, they account for over 66 per cent of the third party payments market in China, based on research by Analysys International.
But not satisfied with just dominating the Chinese mainland, both companies have started laying the groundwork to introduce their services to other Asian markets like Hong Kong and Singapore.
“Tencent and Ant Financial are biting at the heels of incumbent payment operators,” said Michael Yeo, research manager for financial and retail insights at IDC.