China’s Alipay mobile wallet has rapidly expanded its North American presence over the last year to serve more Chinese tourists, and now it’s moving into a more strategic phase of its growth.

Instead of expanding Alipay’s geographic reach across the U.S. and Canada, Alipay is doubling down on merchant acceptance in urban areas and tourist zones to drive more spending volume, said Souheil Badran, president of Alipay Americas, during a keynote speech Wednesday at SourceMedia’s Card Forum in Miami.

Alipay signage
Bloomberg News

“A year ago Alipay aimed for ubiquity with all 8 or 9 million U.S. merchants, but the reality is that we want to focus on major cities and merchant categories that matter most to our customers,” he said. “Our growth is now coming from adding merchants within the most popular areas where Alipay users go."

Even within cities, Alipay is taking a more laser-focused approach to acceptance.

“We don’t need to cover all of Los Angeles—we only need to be in the key locations for major shopping, dining and tourist attractions,” Badran said.

Alipay is a product of Ant Financial, an affiliate of Alibaba. Its international user base consists primarily of Chinese tourists—more than 100 million citizens travel outside of China annually—and in North America it also serves millions of students and workers that use the app and receive a steady stream of deals and offers, according to Badran.

“For example, when they land in a city like Miami, we apply a lot of data and science to deliver them the right coupons and offers,” Badran said.

Alipay's QR code-based payment app is used most heavily by middle class Chinese consumers, which number about 300 million. About 10 million of those are super-prime users who spend between $47,000 and $75,000 annually through the app, according to Badran.

As a result, many merchants in North America are using Alipay’s targeted marketing tools to reach China’s “one-percenters” through the app, Badran said.

Another 50 million Chinese consumers also use Fliggy, Alipay’s online travel platform that enables booking of services like bus and train trips. This platform is seeing more use from North American merchants, he said.

“Fliggy’s audience is young, urban and educated and because it’s integrated with Alipay it’s getting a lot of growth,” Badran said.

Though Alipay has already established most of the key relationships with merchant acquirers it needed to build broad acceptance in North America—Badran said its partnership with First Data Corp. has been crucial to the mission—the app is nowhere near maxing out its merchant growth in the U.S. and Canada.

Badran reiterated that Alipay has no ambitions to go beyond serving Chinese nationals living or visiting the U.S.

"We don't have a wallet for the U.S. consumer, and we don't see a play on the issuing side in the U.S.," he said.