Author(s): Raghu Gopal
This week, Alipay, the financial affiliate of the Alibaba Group, announced plans to advance into European markets after signing deals with Barclays, BNP Paribas, SIX Payment Services and UniCredit.
These agreements add to existing partnerships Alipay had with French and German payments companies Ingenico and Concardis, and Frankfurt airport retailer Tripidi. The expansion into Europe is aimed at Chinese nationals traveling abroad, a market which was worth $215 billion last year. This was a 53 percent rise from 2014, according to the World Travel & Tourism Council.
The partnership with BNP Paribas will allow Alipay payments in France; the deal with Barclays will allow Alipay to tap into the UK. UniCredit will support Alipay's launch in Italy in 2017. The agreement with SIX Payment Services will grant Alipay entry into the Swiss market as well as serving its customers in Luxembourg, Austria and Germany.
Alipay is deeply ingrained in the lives of Chinese consumers and is used to pay for items in stores and online, for goods and services ranging from taxis to restaurants and clothing. It's the leading payment service provider in China, with more than 450 million users and an 80 percent share of the mobile payment market. For Chinese travelling abroad, dealing with Alipay will offer peace of mind.
But Alipay's ambitions go well beyond China, with a stated goal of 2 billion users worldwide over the next decade. Earlier in 2016, the company raised $4.5 billion to fuel its expansion in a funding round that valued the company at about $60 billion. This makes it the second most valuable private technology company in the world just behind Uber. With its sights set on a public stock offering in 2017, Alipay has also made investments in Asia and the US.
The move beyond China is similar to that of its parent company, Alibaba, which has global aspirations. Alipay can begin by expanding its ecosystem to support Chinese tourists, but this will be a learning and network-building process.