Malaysia digital wallet app Touch ‘n Go has partnered with Alipay+ (operated by Ant Group). They will begin operations in mainland China with reach extending to other Alipay+ regions. The partnership opens a new market to Touch ‘n Go users. It highlights the opportunities to merge wallets, prepaid and retailer needs and cross-border payment opportunities. The Malaysian Reserve offers additional details on the burgeoning partnership between the two players. It also highlights the benefits offered to traveling users:
“Touch ‘n Go eWallet users can conduct cross-border payments where Alipay+’s QR code is displayed. The service is also available in Singapore, Japan, South Korea, Britain, Italy, France and Germany, the statement said. ‘Through simple adaptation, more than 2.5 million merchants around the world are able to access and better serve the growing user population of various leading digital payments providers, as digital transformation takes hold around the world,’ said Ant president of international business Angel Zhao.”
The ability to bring digital wallets into cross-border opportunities brings plentiful opportunities in closed-loop prepaid sectors. The closed-loop prepaid sectors have been limited by payment network, exchange rate and technical drawbacks. Touch ‘n Go solves this problem in the Asia Pacific region and beyond for their Malaysian customers. They do this through the partnership with Alipay. The partnership has already created a large network of merchant acceptance in several international regions.
“Alipay+ covered different sectors including over 1,000 online platforms, more than 10 major airports and over 90,000 convenience stores over 360,000 restaurants, nearly 200,000 taxis and major hotel brands, department stores, duty-free shops and tourist facilities in Asia and Europe.”
Merchant Network Key
The merchant network is a large key for linking digital wallets both abroad and here in the United States. As I wrote in my Mercator Advisory Group research this summer merchant acceptance of digital wallets requires updates to payments infrastructure to enable NFC tap-to-pay features such as mobile card readers. This action is rapidly advancing. As Mercator’s Small Business PaymentsInsights research highlights, even among the smallest-revenue businesses, a vast majority use mobile card readers. These enable NFC payments separate from the point-of-sale system.
Our data shows that even 69% of the smallest retailers, those with less than $500,000 of revenue, are already able to utilize NFC based tap to pay options. The potential addition of broader universal wallets to add the preparedness and add closed loop for regional players or even for larger merchants that don’t have fully universal cross border acceptance. Take for example Starbucks where a U.S. customer can use their balance at most locations in North America, Australia, Ireland and the United Kingdom. Working with linked wallets could rapidly expand that potential to near universal acceptance.
While universal wallets will not entirely solve the many complexities of cross-border payments, especially in merchant led stored value accounts, the ability to break down those virtual borders is a positive sign for consumers to be able to more freely use their balances along side their traditional debit and credit cards when travelling.
Overview by Jordan Hirschfield, Director of the Prepaid Advisory Service at Mercator Advisory Group.