Alipay, the mobile payment system offered by Chinese e-commerce giant Alibaba, is coming to the U.S., thanks to a deal brokered with credit card processing service First Data Corp.
The expansion follows limited trials in California and New York, and will bring Alipay into direct competition with Apple Pay, Android Pay, and PayPal. Alongside online payments and money transfers, Alipay users can also hail a taxi, book a hotel, and buy movie tickets directly from within the app.
The partnership will allow Chinese tourists who visit the U.S. to use their mobile phones to complete transactions at 4 million merchants and retailers around the country. That compares to about 4.5 million U.S. merchants that currently accept Apple Pay.
The U.S. is behind China in terms of the proportion of customers using mobile payments, but that's forecast to change in 2018. As noted by Bloomberg, given U.S. consumer's relative indifference to mobile payments, Alipay's entry into the country may actually benefit Apple, as more retailers gear up to offer tap-and-go transactions to shoppers, be they Chinese tourists or U.S. residents.
Alipay has about 450 million customers worldwide, but Alipay's deal with First Data aims to offset the mobile payment's loss of ground in China to rival Tencent Holdings, which has successfully leveraged the popularity of WeChat to roll out WeChat Pay. The WeChat app's dominance in the country is also said to have negatively affected the relevance of iOS features in China.
In February, Apple partnered with China's state-run bankcard association, China Union Pay, enabling the lender's cardholders to use Apple Pay.