Alipay and WeChat Pay are both attempting to expand rapidly abroad in a bid to capture revenue from the growing number of Chinese tourists. Malaysia is the latest market WeChat Pay is targeting to overtake Alipay, but its newest move is a sharp departure from previous strategies. Tencent, the developer of the social media and messaging app WeChat, has applied for a license to allow Malaysians link local bank accounts to WeChat Pay and use the service for mobile payments.
This move is a first for Tencent. Instead of simply entering into partnerships with firms to offer WeChat Pay, Tencent’s Malaysia application targets locals as well as Chinese tourists. Malaysia will be the first market outside of China WeChat offers this kind of service, excluding Hong Kong.
Although this move also targets local Malaysians, Tencent maintains that it is still fundamentally a move to facilitate Chinese tourism. Grace Yin, director of WeChat Pay, noted, “The short-term target is still Chinese tourists… The priority is nearby countries most frequented by them, such as those in Southeast Asia.”
The expansion into Malaysia may signal more such targeting of local markets opposed to simply partnerships and may encourage locals and local firms to use WeChat Pay, making WeChat even more useful for Chinese travelers.
By expanding the range of goods and services that can be paid for through WeChat Pay, Chinese travelers to Malaysia could hypothetically avoid hard cash exchanges altogether and enjoy cashless travel experiences abroad.
Alipay is still the larger of the two mobile payment services, but WeChat Pay is gaining ground quickly. Alipay and WeChat Pay maintain 55 percent and 40 percent of the China mobile payments market respectively.
In the past few years, WeChat has entered into partnerships with firms abroad to offer WeChat payment services abroad for Chinese tourists to facilitate transactions. This includes expansion into Europe through partnerships with luxury retailers. Tencent also already has plans for US expansion.
Alipay has been doing its own set of high profile global expansions. ANT Financial, Alipay’s parent company, invested US$200 million Kakao Pay. Kakao Pay is a mobile payments platform provided through the Korean messaging app, Kakao. Alipay also recently initiated plans to offer mobile payments at many high profile luxury resorts, hotels, and casinos in Monaco.