China’s mobile-payments king wants a piece of the world’s biggest consumer market.
Alipay (支付寶), owned by Alibaba Group Holding Ltd (阿里巴巴) chairman Jack Ma’s (馬雲) Ant Financial Services Group (螞蟻金服), reached a deal that would let its users shop at 4 million US merchants served by payments processor First Data Corp, the companies said on Monday in a joint statement.
The rollout is to begin with businesses that use First Data’s Clover products.
“This will open up Alipay to where it’s truly ubiquitous across the United States and hopefully more countries later,” Alipay North America president Souheil Badran said.
In the US, “we decided rather than trying to do it on our own, this is an ecosystem that we’re looking for a partner that can provide scale,” he said.
Alipay and Tencent Holdings Ltd’s (騰訊) WeChat Pay (微信支付) dominate the mobile-payments market in China with a combined 90 percent share. Alipay wants to leverage the millions of Chinese customers who go abroad by offering them services wherever they go.
The firm’s mobile wallet — which can hold cards from American Express Co, Visa Inc and Mastercard Inc, among others — is already accepted by more than 100,000 retailers in 70 international markets, the company said.
The First Data deal would put Alipay in the same league as Apple Pay in terms of acceptance.
Apple Inc’s mobile payments service can be used at 4.5 million locations in the US, Apple chief executive officer Tim Cook said last week on a call with analysts.
Still, Alipay, which started in 2004 as an online payments processor for Alibaba’s e-commerce sites, is entering a market that is much less reliant on mobile transactions than its home country. China’s mobile payments transactions topped 38 trillion yuan (US$5.5 trillion) last year, triple that of 2015, Beijing-based Iresearch said.
That compares with US$112 billion in the US, Forrester Research said.
Alipay is just the latest Chinese payments player looking to make a deeper push abroad.
Ant Financial has agreed to pay US$1.2 billion for the US-based money-transfer service MoneyGram International Inc. In addition, China UnionPay Co (中國銀聯) is working with US payments networks to develop international standards for mobile payments.
First Data, which was taken public by private-equity giant KKR & Co in 2015, operates a debit-card network, processes card transactions and provides merchants with fraud detection and data-analytics services.
The company began a trial run with Alipay at select luxury stores in California and New York in November last year.
First Data shares have climbed 17 percent this year, outpacing the 3.4 percent advance of the 245-company Russell 1000 Financial Services Index.
On Monday, the company reported first-quarter revenue of US$1.73 billion, fueled by a 7 percent increase in transactions at its global business solutions unit.
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