As Ant Financial, the Alibaba affiliate, continues to expand in Europe, announced partnerships with European banks. The company runs the Alipay payments service.
The company claimed that an additional 930,000 merchants would be allowed to start accepting Alipay if they wish to do so by the deals with BNP Paribas, Barclays, UniCredit, and SIX Payment Services.
Alipay, which has a total of 450 million active users and processes 170 million transactions per day, is China’s biggest payments service and is run by Ant Financial. Chinese users traveling abroad are the target segment of the expansion into Europe. Alipay is used to pay for items in-store and online, for goods and services ranging from taxis to restaurants and clothing and is deeply ingrained in the lives of Chinese consumers.
Alipay payments would be allowed to be facilitated via BNP’s merchant network in France and later in Europe by the partnership with BNP Paribas. Alipay will be able to tap the U.K. market with Barclays. Alipay would be able to expand onto e-commerce platforms and in-store across Europe by SIX which is a payment service provider. And next year, UniCredit will aid Alipay in launching the payment service in Italy.
Alipay has been working on getting merchants using its platform after it first expanded into Europe in October 2015 in Germany. In locations such as famous London department store Harrods and Munich airport, the payments service is now available to be used. Users can also process tax refunds via the app in 23 European countries.
Excluding mainland China, it had a network of close to 100,000 retailers in 70 countries and regions, Ant Financial said that at the end of the third quarter of 2016.
Particularly when there are many payment rivals outside of China such as Apple Pay, capturing Chinese travelers abroad is key to locking users into the Alibaba ecosystem. According to the World Travel & Tourism Council, Chinese tourists spent $215 billion abroad last year, a 53 percent rise from 2014. Alipay is hoping that much of this spending will be through its app.
Douglas Feagin, head of international operations at Ant Financial, hinted that the company could offer the service to international users in the future, while Alipay doesn’t directly compete with the likes of Apple Pay or Google’s Android Pay in Europe, because it’s aimed at Chinese users.
“In terms of focus on Europe, we like to initially expand Alipay to be much more of a global product with global users. And we’re going to do that step by step. Right now we are focused a lot on Asia with a partnership with PayTm in India … we’ll look to expand that across Asia, then we’ll look to Europe and the United States for future growth,” Feagin said in a TV interview.
Last year, Alibaba and Ant Financial invested $680 million in PayTm, an Indian payments start-up.
In a round that valued the company at around $60 billion, Alipay raised $4.5 billion earlier this year to fuel its expansion. Behind Uber which is worth over $62 billion, this makes it the second most valuable private technology company in the world.
(Adapted from CNBC)