Payments

Chinese social payments apps enter US market

  • Alipay has landed in the U.S. just days after WeChat began its North American expansion.
  • Alipay's deal with First Data may seem like a threat to Apple Pay, but could also help drive mobile payments among U.S. consumers.
close

Email a Friend

Chinese social payments apps enter US market
Alipay has landed in the U.S. following its do-everything social payments competitor WeChat, who moved in last week, signaling the start of a payments arms race here. Alipay, China’s dominant mobile payments company under Ant Financial, signed a deal Monday with First Data, the U.S. card processing giant, that will allow Chinese tourists in the U.S. to make purchases at its 4 million merchant locations using Alipay. The expansion stateside follows that of Tencent Holdings’ WeChat, which announced its plans in February and arrived in the U.S. on Thursday. “These consumers love to shop in the U.S. because they find items here they would otherwise not be able to find in China, and pricing that is much more affordable,” said Souheil Badran, president of Alipay North America. “Our focus will continue to be on enabling the Chinese consumer to use Alipay at U.S. merchants.” Mobile payments still lag behind China, but growth is expected to top the Asian country in the next year, according to estimates.

To some degree, that makes Alipay a threat to Apple Pay, which has been ahead of its peers in monthly active users, but is leading a race people generally aren't interested in. And its mobile payments peers, Samsung Pay and Android Pay, aren’t far behind. Many point the finger at retailers, who have been slow to get any systems and incentives in place to encourage consumers to pull out their phone instead of their cards. By contrast, Alipay, WeChat and the concept of mobile payments is common to Chinese consumes and by now, probably pretty natural to them. China is a mobile-first country. In addition to making online shopping payments, transferring money and paying utility bills, WeChat and Alipay users can hail taxis, book hotels, buy movie tickets, make doctors’ appointments and book karaoke sessions top up their mobile phones from within the apps. “Alipay is a lifestyle application platform offering not only payment processing but also financial services, social and commerce use cases,” Badran said. “Alipay is part of our consumers’ daily life.” But the bigger problem for Apple is the lack of widespread consumer-to-business mobile payments uptake, not Alipay, Samsung Pay or any of it’s competitors. Bringing millions of mobile payments users -- even if its Alipay that makes that happen -- into millions of stores could be the push that U.S. consumers need to break old habits -- taking out the plastic -- and creating a new one, tapping the phone that’s probably already in hand. CEO Tim Cook boasted numbers in the “tens of millions” with 450 percent year-over-year growth last July, the last time he spoke publicly on the subject. There are 4.5 million merchants in the Apple Pay network. Meanwhile. Alipay boasts 450 million monthly active users, who now have access to four million merchants through First Data. There are more than four million Chinese visitors to the U.S. each year, Badran said. WeChat boats 650 million monthly daily active users. “When First Data moves in a business it’s not an experiment,” said Ashish Bahl, CEO of Acculynk, First Data’s recently-acquired technology company that provides innovative debit routing solutions. “A lot of work has been done to make sure it works, it’s scalable and adoption is ready. Merchants are open to delivering new payment types to existing consumers and if we can get in the flow of consumer brands, whether they're issuers or wallets, that's really a good thing.”

0 comments on “Chinese social payments apps enter US market”

Banking, Payments

Santander embraces the Earned Wage Access trend, taps DailyPay to strengthen client relationships

  • Santander Bank has tapped DailyPay to incorporate the Earned Wage Access offering into its treasury management in a move to benefit its commercial banking clients in the US.
  • The EWA offering can serve as an impactful tool for bank clients, bolstering the bond between the employee and the employer as well as establishing a sound footing for their businesses. In turn, it deepens the client-bank relationship and reinforces the growth that they can achieve together.
Sara Khairi | June 01, 2023
Lending, Payments

Can lenders improve the financial health of consumers through design?

  • Design can play a critical role in improving consumers' financial health when it comes to lending.
  • Research by the Financial Health Network shows that areas like defaults, making payments, and borrowing the right amount can be significantly improved through behavioral design principles, to ensure customers make decisions that improve their financial well-being.
Rabab Ahsan | May 26, 2023
Payments

5 questions with Zip CEO Larry Diamond

  • Payment act as a beachhead for financial services firms to more deeply serve customers, according to Zip's Larry Diamond.
  • We spoke to the payment firm's CEO about his new focus on the US and the future of the company.
Zachary Miller | May 15, 2023
Payments

Microsoft brings payments for businesses on Teams

  • Microsoft has collaborated with Stripe and PayPal to enable in-app payments for small businesses on Teams.
  • Connecting or signing up for one service – Stripe or PayPal – is required to set up the Teams Payments app, with support for GoDaddy in the cards.
Sara Khairi | May 11, 2023
Payments

Tokenization, programmable payments, inclusion: Unpacking near-term trends in the payments ecosystem

  • Very little appears to be staying the same where the payments industry stands in 2023 compared to where it’s headed in the next few years.
  • Tokenization beyond cards, borderless rails, credit for the underbanked, and the proliferation of payment acceptance options are some of the near-term trends in the payments ecosystem, suggests a new Mastercard report.
Sara Khairi | May 10, 2023
More Articles