Jack Ma (center)
Jack Ma will set a bag aside for you at your favorite Paris store or hail you a ride in Rome – just as long as you’re not European.
China’s biggest third-party payments platform Alipay, an affiliate of Ma’s Alibaba Group Holding Ltd., is signing deals with brick and mortar retailers in Europe to bulk up its offering for Chinese tourists and expats. It’s seeking to add extras to its mobile wallet app for Chinese travelers in France, the U.K., Germany and Italy, though it has no plans to offer its services to consumers who aren’t from China.
“Europe is a popular destination for our Chinese customers, so it’s an important market for us,” Rita Liu, head of Alipay Europe, Middle-East and Africa, said in an interview. “We’re actively looking for partners across Europe – merchants who want to cater to Chinese tourists or technical providers on the payments side. But we have no plans to target European customers.”
Alipay held talks with retailers in the French capital including Printemps, one of the city’s biggest department stores; it unveiled a deal last week to sell travel insurance from Axa SA to its users; and it’s working with Germany’s Wirecard AG to support the mobile wallet service in as many as 69 stores at Munich Airport. Alipay is in talks with other technical, retail and payment partners in France and Germany, as well as the U.K. and Italy, Liu said.
The cross-border strategy mimics one Alipay – with 450 million users – has deployed with U.S. partners. It has cut deals with the likes of Uber Technologies Inc., Airbnb Inc. and Macy’s Inc. to let Chinese customers pay with the Alipay wallet, either by tapping their phone on a contactless register or having a cashier scan a bar code on the mobile screen to charge a registered account.
It highlights how in payments, as with other tech sectors, Europe and the U.S. need Chinese customers more than the other way around, echoing Uber’s humbling lesson from selling its Chinese operations to local rival Didi Chuxing.
About 120 million Chinese tourists traveled last year, and their most popular destinations outside Asia were France, Italy, Switzerland and Germany, data by the China Tourism Research Institute showed. They spent USD875 each on average while traveling.
In the war to dominate how consumers around the world pay for purchases, China is miles ahead. Tencent Holdings Ltd has 700-million-plus users on its WeChat messaging platform, where it offers financial services including payments, dwarfing the few dozen million subscribers combined who’ve adopted mobile wallets by Apple Inc., Google or Samsung Electronics Co. It’s still early days for Facebook Inc., which is hoping it can make its way into payments by investing in helpful robotic assistants that will let consumers send texts on its Messenger chat service to order hamburgers or office supplies.
In a world where all roads lead to payments, Alipay’s latest initiatives show hand-holding customers through their purchases is a key function of the business. The end-game for these digital giants, regardless of which side of the globe they’re on, is to become an important driver of commerce and put themselves in a position to take a cut of transactions they help generate.
To do that, all are seeking to grow the lists of retailers who’ll accept their payments service alongside a Visa or American Express card. Facebook, for instance, said it’s lined up more than 30 partners, including Bank of America, Burger King, and Staples, in its chatbots push. In China, Apple’s $1 billion investment in the country’s biggest ride-hailing service was seen helping win powerful local allies to push services including Apple Pay.
“The key battle for digital giants today is scale on the merchants side. That’s true for anyone from Alipay to Apple or Facebook,” said Michel Leger, head of innovation at Ingenico Group SA, which recently cut a deal to manage electronic cross-
border purchases for Alipay. “They each have a relationship with millions of consumers, but they need the other side of the equation – the address book of merchants.” Marie Mawad, Bloomberg
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