As the two most successful payment platforms in China, Alipay and WeChat both share aspirations for overseas expansion. Following aggressive M&A activities in Southeast Asia, the two giants are now eyeing the US market, which is dominated by Apple Pay.
In China’s domestic online payment market, which is now the largest in the world, Alipay accounts for 42.7% of online payments, while Tenpay (WeChat) accounts for 19.2%, as of Q4 2016.
Alipay and WeChat enjoy large market shares in China, but are now looking abroad. Data from Iresearch.
Despite strong growth potential in the domestic market, Alipay and WeChat are looking for new opportunities in overseas markets that are less competitive. Data from Iresearch show that mobile payments in China totalled US$5.5 trillion in 2016. In the US, the equivalent figure was only US$112 billion, according to Forrester.
Alipay pushed into the US market earlier this week by announcing a deal with payments provider First Data. The deal targets Chinese tourists travelling in the US and integrates the Alipay platform with First Data’s payments platforms, allowing Alipay users to shop at four million US merchants. The rollout will begin with businesses that use First Data’s Clover products.
“Our goal is to extend reliable payment services to the over four million Chinese consumers that visit North America every year,” says Souheil Badran, president at Alipay North America. “Extending our partnership with a premier partner like First Data provides merchants with access to consumers who want to continue paying with their lifestyle mobile app.”
WeChat also has designs on the US. A week before Alipay’s announcement, WeChat announced a partnership with Citcon, a mobile payments platform, to connect global merchants with Chinese travelers.