The mobile payments market in China is a fiercely competitive duopoly between WeChat Pay and Alipay, with a slight advantage going to Alipay, estimated to have a 54% market share. Retail Dive reported that WeChat is looking to close that gap in part through a new partnership with Walmart in China:
Walmart will replace the Alipay digital mobile payments system it previously has accepted in its stores in Western China with WeChat Pay, Alipay’s main competition in China, Reuters reports.
China is the largest mobile payments market in the world, with about $9 trillion in such payments last year, and Alipay held around 54% market share, while WeChat Pay was up to 40% market share, according to a recent report from The Wall Street Journal.
Competitively, this makes sense. Alibaba which is the ecommerce behemoth and competes with Walmart owns a minority stake in Alipay. WeChat is much less of a retail threat.
There has been much written lately that WeChat Pay and Alipay are making in-roads in the Americas. Right now, this means striking deals with acquirers to accept the Chinese digital payment types for tourists from China. Some in the industry have suggested that it is just a matter of time before WeChat and Alipay are offered to Americans. I doubt this will happen anytime soon. The use of mobile is off to a very slow start, and the idea of the Chinese government having access to Americans’ payment data won’t sit too well. Mercator Advisory Group will be publishing a report next month regarding these rival payment apps.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group
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