Chinese mobile payment service Alipay has arrived in the U.S.
Chinese mobile payment service WeChat Pay has also arrived- at the same place, at the same time.
Ant Financial closed a deal with payment processor firm First Data for Alipay to be available in more than 4 million retail companies in the U.S.
Tencent Holdings’ WeChat Pay launches in partnership with Silicon Valley based CITCON.
WeChat Pay is China’s leading mobile payment service and boasts a userbase of 900 million
Both companies state the expansion into the U.S. market is really mostly targeted at Chinese tourists. Why?
Let’s connect the dots, shall we-
- 90% of the Chinese population now use ‘digital wallets’
- The U.S. receives around 4 million Chinese tourists each year
- The numbers are only expected to grow- the U.S. Travel Association estimates Chinese tourists to reach the 6 million mark by 2021; Goldman Sachs predicts a staggering 220 million Chinese tourists will travel abroad come 2025.
“This will open up Alipay to where it’s truly ubiquitous across the United States and hopefully more countries later,” said Souheil Badran, president of Alipay North America.
This pivot puts both Alipay and WeChat Pay in prime position to cover large consumer markets outside of China- although while Alipay is focusing on the U.S., and WeChat seems to have set its sights to have operations in Europe with offices opening soon in Italy, and in the U.K.
WeChat states, “Following Chinese tourists’ footprints, WeChat Pay has kickstarted cross-border services in China’s neighbouring countries and regions, such as Hong Kong, Japan and Southeast Asia and will gradually expand across the world.”
As far as this U.S. expansion goes, the two will find themselves in direct competition with Apple Pay, Android Payand PayPal.
Alipay is currently supported in 70 countries while WeChat Pay can be found in 15 countries and regions. In contrast, Apple Pay is accepted in 15 countries and Android Pay is supported in only 10. Globally, PayPal is still in the lead with the service available in 200 countries and in 25 currencies.
As new players in the U.S. market Alipay and WeChat Pay will see some challenge stacking up against established and trusted payment methods although the ease of usage and the large number of Chinese consumers means widespread, if not full, adoption of both is only inevitable.
Ant Financial will have to get past Euronet to acquire MoneyGram
It seems Ant Financial has plans to spread its wings- in a major way. The firm is currently in a bidding war with Euronet to acquire cross-border currency transfer service MoneyGram for $880 million… although the latest news is Euronet has laid down more than $1 billion and MoneyGram is keen and opening its books to the offer. If Jack Ma & Co. manage a MoneyGram integration this essentially means Alipay users will have the option to transfer money across borders, a notion that is making law makers nervous.
Tencent, on the other hand, has an established office in San Francisco and is said to be zeroing in on advertisers and payment providers that side of the globe.
So, there you have it. May the best man win.