This week’s announcement that Paymentwall and Tencent have partnered to make WeChat Pay available worldwide is further evidence that the Chinese payment provider has global reach, and it is not alone. As a result, WeChat payments will be able to get processed in the US, the Middle East, Southeast Asia and Latin America. Like WeChat Pay, Alibaba’s AliPay is also busy partnering with overseas companies to access global markets.
The key to both of their global expansions is China’s international tourists. Indeed, Chinese tourists travelling abroad are the means by which many high tech Chinese companies are accessing international markets. In the case of WeChat Pay and AliPay, they are the top two payment providers for Chinese tourists overseas, allowing access to their china-based financial and money accounts abroad.
For foreign companies, accessing these Chinese tourists via deals with WeChat Pay or AliPay can be extremely lucrative. Chinese tourists are famous for bulk buying and spending a lot of money overseas. In 2015 alone, Chinese tourists spent $230 billion overseas. And it is not just overseas where Chinese consumers are spending more; in 2016 downloads of finance apps in China increased 230 percent. The Chinese market though is not a closed shop for Chinese companies. Increasing competition in the e-payment field in China, Apple Pay and Samsung Pay have now entered the domestic market.
While the user base of WeChat Pay is still Chinese, international companies are looking towards WeChat to access those consumers. As a result, having retail points of sale in North America and other countries add WeChat Pay as a payment option also allows foreign vendors access to that massive Chinese consumer base. While WeChat Pay is providing accounts for foreign vendors, foreign companies do not have to establish a Chinese company to accept payments, which can take a variety of forms, for example, mobile payments, bank transfers, prepaid cards, as well as debit and credit cards.
China’s two dominant mobile payment providers – WeChat Pay and AliPay – continue to spread their Chinese market stranglehold worldwide. In China, for example, WeChat Pay accounted for $1.5 trillion of that county’s digital payments in 2016. With 600 million active users, WeChat Pay reportedly accounts for nearly a third of all online transactions. While 94 percent of China’s mobile payment market is controlled by WeChat Pay and Alipay – Alipay ahead 54 percent to 40 percent – WeChat Pay continues to erode Alipay’s domestic lead.
Despite not being well-known outside of China, the two companies’ evolving partnerships with retailers, global brands and travel outlets such as airports - essentially wherever you find Chinese tourists - is starting to pay considerable dividends.
As WeChat Pay and Alipay gain access to foreign markets – both for example, signed deals with Citcon in 2017 to access the North American market – WeChat Pay continues to sign new international deals such as in India, along with opening new offices in Europe and the UK, to add to its offices already established in San Francisco and Italy. As the payment service cuts into Alipay’s market lead in China it is aggressively seeking to dominate payment services overseas, at least where Chinese tourists are concerned.
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