London-based Powa Technologies has formed a 10-year alliance with China UnionPay to extend the PowaTag smartphone shopping app to CUP’s 1.3 billion credit and debit cardholders.

PowaTag, which was launched in 2014, enables consumers to order and pay for products within about 3 seconds of snapping a photo with their smartphone of a product’s image within an ad, catalog, coupon or the product’s packaging itself.

Retailers may use PowaTag to customize shopping by connecting with customers’ mobile devices inside stores via Bluetooth Low Energy (BLE) beacons. PowaTag’s technology leverages the so-called “online to offline” market for companies expanding their omnichannel sales channels, a niche Powa says is growing 80% annually.  

In the first phase of the joint venture, Powa and CUP are developing a co-branded app called PowaTag UnionPay. Consumers enter their payment and shipping details into the app, and use their smartphone’s camera to scan images for purchase. Merchants reportedly pay a fee of about $0.19 for each purchase. More than 1,200 merchants worldwide have signed up for the service since it launched last year, Powa said.

PowaTag UnionPay will be available first to consumers in China’s Guangdong Province, which has a population of 106 million, before expanding across China in 2016. Powa CEO Dan Wagner believes PowaTag UnionPay could reach about 1 million merchants and 50 million consumers by the end of 2016.

Powa’s partnership with CUP should stir competition with other China e-commerce giants including AliPay, operated by Alibaba’s affiliate Ant Financial, and WeChat, another popular e-commerce platform in China.

“Powa’s move to integrate ‘online to offline’ shopping with a payment strategy [in China] makes sense as the world increasingly moves toward omnichannel transacting,” said Beth Robertson, managing director at Robertson Payments Services LLC.

Powa, which originally focused its business on mobile point-of-sale dongles, was established in 2007. The firm has raised $174 million, primarily from Boston-based Wellington Management.

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