China's Alipay grabs slice of U.S. market with First Data deal
China’s mobile-payments king wants a piece of the world’s biggest consumer market.
Alipay, owned by Jack Ma’s Ant Financial, reached a deal that will let its users shop at 4 million U.S. merchants served by payments processor First Data Corp., the companies said Monday in a joint statement. The rollout will 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,” said Souheil Badran, president of Alipay North America. In the U.S., “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.”
Alipay and Tencent Holdings Ltd.’s WeChat Pay dominate the mobile-payments market in China with a combined 90 percent share. Alipay now wants to leverage the millions of Chinese customers who travel 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 will 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 U.S., 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 Group Holding Ltd.’s e-commerce sites, is entering a market that’s much less reliant on mobile transactions than its home country. China’s mobile payments transactions topped 38 trillion yuan ($5.5 trillion) in 2016, triple the previous year, according to Beijing-based IResearch. That compares with $112 billion in the U.S., Forrester Research said.