In addition, since Alipay and WeChat Pay aren’t the only potent mobile payment service providers who eyed abroad, they also have to compete with other foreign third-party payment giants.
At present, Alipay has already entered 26 countries and regions around the world, including European countries, the U.S., Japan, South Korea, South East Asian countries, Hong Kong, Macau and Taiwan, etc. and supported payment via 18 foreign currencies. As over 100,000 offline stores overseas have already supported Alipay, it has already started to spread its influence outside mainland China.
However, it is worth noticing that Facebook may not necessarily be at an advantage than WeChat and Alipay in terms of third-party payment technology. Likewise, although Samsung and Qualcomm are industry-leaders in terms of wireless charging technology, their Chinese counterparts such as Weie Tech and BYD don’t lag far behind them.
The existing challenge Chinese mobile payment service providers are facing1. The limit of tourism consumption
In fact, the primary focus of both Alipay and WeChat Pay overseas has been tourist consumption. Although they’ve also focused on other sectors, such as e-wallet and social networking, etc., tourism consumption remains their top priority.
In response, Alipay chose to avoid direct competition with South Korean counterparts and team up with Kakao Pay, a local third-party mobile service provider, to enter the South Korean market. It is only by means of a local brand that Alipay can reduce xenophobia against a foreign brand like Alipay.
2. The difficulty in promoting e-wallet service
3. Governments’ interference
As long as local residents can’t use Alipay or WeChat Pay and enjoy its convenience, it will be rather hard for Chinese mobile payment service providers to expand overseas. However, it takes time to develop user habit and make mobile payment part of local residents’ lives. In the short term, they will have to make up the limit with other aspects of services.
Compared with Alipay, WeChat may face even more difficulty in its overs expansions. How come? In a sense, what WeChat does in China is what Facebook and Twitter do abroad. Faced with the huge challenge from overseas social networking platform, it’s no easy thing for WeChat to expand in overseas markets, let alone promoting its mobile payment service. Worse still, WeChat may not understand well the user habit of overseas users. This may help explain why users of the overseas version of WeChat APP are still mainly overseas Chinese.
Born as late as in August, 2013, WeChat Pay suffered from a huge challenge from Alipay at the primary stage. However, thanks to its huge influence in the social networking sector, WeChat Pay soon caught up and grabbed part of Alipay’s market share. Likewise, WeChat Pay has also been actively making efforts to go abroad, though much later than Alipay.
Again, let’s take India for an example: As the competition among Indian mobile payment service providers continues, the Indian market announced that it would soon launch a Unified Payment Interface (UPI) and BHIM, a government-backed mobile payment tool, which, for sure, is going to have a huge impact on the Indian mobile payment market.
As a matter of fact, Alipay and WeChat Pay have already been engaged in head-on competition. To attract Chinese tourists to use WeChat Pay overseas, WeChat has teamed up with CITCON to enter the US market. A month ago, WeChat also announced that it would soon enter the UK market.
As is mentioned above, although Alipay and WeChat Pay look quite promising in their overseas expansion, they do have to face a couple of major obstacles.
