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”

Payments, Podcasts

Payoneer’s Charles Rosenblatt: ‘We found a way to play on both sides of the market’

  • Charles Rosenblatt has a long career in payments.
  • Joining Payoneer recently as chief strategy officer, he joins us to discuss the company's progress and future plans.
Zachary Miller | September 14, 2020
Payments

Ant Group files to go public in what could be the largest IPO in history

  • China's Ant Group has filed for a massive dual listing in Shanghai and Hong Kong.
  • The payments firm has expanding into banking, insurance and investing via third parties.
Zoe Murphy | August 26, 2020
Payments, Podcasts

WePay’s Jennifer Parker: ‘We’re seeing inspiring early pivots with software firms and marketplaces’

  • WePay provides payment APIs to ISVs and marketplaces.
  • CRO Jennifer Parker joins us on the podcast to discuss initiatives she's leading during the crisis.
Zachary Miller | August 06, 2020
Payments, Podcasts

Afterpay’s Laura Nadler on the new loyalty program and expansion plans in the U.S.

  • Afterpay is one of the fastest growing buy now, pay later firms in the world.
  • The US CFO joins us to talk about levers for that growth and the fintech's priorities for 2020 and beyond.
Zachary Miller | August 04, 2020
Payments

Mastercard partners with Microsoft to accelerate innovation across payments

  • Financial inclusion is a big theme for both firms.
  • Microsoft's Azure cloud environment will provide the infrastructure for Mastercard's partners' inclusion products and services.
Zoe Murphy | July 28, 2020
More Articles