WeChat Pay ex­pands in­ter­na­tion­ally to catch up with, and pos­si­bly over­take, mar­ket leader Ali­pay

China Daily (Hong Kong) - - BUSINESS - By HE WEI in Shang­hai hewei@chi­nadaily.com.cn

WeChat Pay, the mo­bile pay­ment tool de­vel­oped by in­ter­net ma­jor Ten­cent Hold­ings Ltd, is ac­cel­er­at­ing over­seas ex­pan­sion as it nar­rows the gap with first-mover Ali­pay in China’s red-hot dig­i­tal pay­ment arena.

In its lat­est en­deavor, the com­pany has ap­plied for a li­cense in Malaysia to of­fer lo­cal pay­ment ser­vices via the app. If it is ap­proved, the li­cense would al­low lo­cal users to link their lo­cal bank ac­counts to WeChat Pay and make pay­ment in the lo­cal cur­rency, the Malaysian ring­git.

The push into the Malaysian mar­ket high­lights Ten­cent’s am­bi­tion to cap­i­tal­ize on a grow­ing num­ber of in­ter­net­savvy users who are get­ting used to mak­ing pay­ments by phone. Ten­cent wants to vie for a big­ger slice of the over­seas mar­kets wher­ever the Chi­nese tourists and the di­as­pora have a grow­ing pres­ence.

The de­vel­op­ment comes just days af­ter both WeChat Pay and Ali­pay struck a deal with US dig­i­tal pay­ment firm Stripe ear­lier this month, al­low­ing mer­chants who use the lat­ter to process trans­ac­tions to ac­cept Chi­nese pay­ment tools on their web­sites and apps.

Ten­cent has taken the pay­ment ser­vice to the United States two months ear­lier through a part­ner­ship with Sil­i­con Val­ley-based mo­bile pay­ment startup Cit­con.

Un­der the agree­ment, WeChat users in China can ex­tend their cash­less trans­ac­tions for shop­ping and taxis when they travel abroad.

WeChat is quickly gain­ing mo­men­tum as its 938 mil­lion ac­tive users — more than dou­ble that of Ali­pay’s 450 mil­lion — form the back­bone of China’s mo­bile bank­ing mar­ket, which clocked trans­ac­tions worth 18.8 tril­lion yuan ($2.77 tril­lion) in the first quar­ter of this year, ac­cord­ing to Bei­jing- based con­sul­tancy Analysys.

WeChat Pay’s share grew ex­po­nen­tially from low dou­ble-digit level just two years ago to 40 per­cent by the first quar­ter, while that of Ali­pay shrunk to 54 per­cent, ac­cord­ing to Analysys.

Still it is play­ing the “chase and catch up” game with Ali­pay, with the lat­ter hav­ing a wider global net­work for now. At the cur­rent stage, WeChat Pay is pri­mar­ily tar­get­ing Chi­nese out­bound tourists, who are be­com­ing af­flu­ent and ac­cus­tomed to the con­ve­nient “scan and pay” pay­ment ex­pe­ri­ence at home.

“The short-term tar­get is still Chi­nese tourists,” said Grace Yin, di­rec­tor of WeChat Pay’s global oper­a­tions, on the side­lines of a tech­nol­ogy con­fer­ence in Hong Kong. “The pri­or­ity is nearby coun­tries most fre­quented by them, such as those in South­east Asia.”

Cur­rently, such cross-bor­der trans­ac­tions are avail­able in 13 coun­tries and re­gions, cov­er­ing over 130,000 shops and sup­port­ing pay­ments in 10 cur­ren­cies. To beef up such ca­pa­bil­ity, the in­ter­net gi­ant also led a $13 mil­lion fund­ing round in Aus­tralian cross-bor­der pay­ment firm Air­wallex.

Thai­land is on the list of coun­tries where WeChat Pay has re­ceived a warm wel­come. Bangkok’s duty-free out­let King Power has seen sales sig­nif­i­cantly jump as more Chi­nese tourists adopted WeChat for pay­ment, ef­fec­tively short­en­ing the long queue at check­outs, said the store’s mar­ket­ing man­ager Kuang Wei.

“(WeChat Pay) lit­er­ally ex­tends the shop­ping ex­pe­ri­ence from China to Thai­land… shop­pers don’t have to worry about ex­change rate or even the lan­guage bar­rier — sim­ply scan and pay,” he said.

The store also pub­lishes pro­mo­tional ads and dis­count coupons through its WeChat of­fi­cial ac­count, a ser­vice now be­ing picked up by most mer­chants do­ing busi­ness in China as a gate­way to cus­tomers.

In Ja­pan, three quar­ters of stores in­side Tokyo’s Haneda Air­port now ac­cept WeChat as a pay­ment op­tion, boost­ing monthly rev­enue “by a large mar­gin”, said Takeshi Fu­jin, deputy se­nior ex­ec­u­tive of­fi­cer.

“Duty-free stores and even taxis in Tokyo, which is a pop­u­lar des­ti­na­tion for Chi­nese trav­el­ers, can now be found us­ing WeChat Pay,” said Hunter Williams, part­ner of global con­sul­tancy Oliver Wy­man.

“This fol­lows the ex­pan­sion of Union­Pay’s ac­cep­tance abroad,” he said.

Num­ber of cur­rent ac­tive users of WeChat, which is gain­ing mo­men­tum quickly

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