Alipay Steps Up Push to Cater to Chinese Travelers in the U.S.

China’s most-used mobile payments provider, Alipay, has been establishing a beachhead in North America, defying the established banks and card networks MasterCard and Visa that process most Western consumer cashless payments.

On Monday, Alipay, which claims to have 600 million users, became available as a payment method for about 35,000 North American merchants to adopt, thanks to a technical integration provided by payments processor First Data.

Many travel companies are among the early adopters, such as the New York, Boston, and Los Angeles properties in the Millennium Hotels & Resorts chain.

Over time, First Data will roll out the Alipay capability to about 4 million merchants.

Alipay is targeting the small but growing numbers of Chinese travelers who visit North America each year and who prefer to make purchases abroad the same way they do at home.

A majority of China’s approximately $11 trillion a year in mobile payments are processed by Alipay, run by Ant Financial — an affiliate of the Chinese e-commerce group Alibaba.

Alipay and its rival Weixin Pay — also called WeChat Pay and owned by tech giant Tencent — use distinctive processes. For many mobile payments, they typically require a user to scan QR, or Quick Response codes, which are square, checkered symbols that can be scanned by a smartphone camera.

The mobile payments companies also cut middlemen such as banks and card networks like Visa and MasterCard out of the process.

For these reasons, companies like First Data need to do technical work to enable the payment systems to work with the point-of-sale systems used by most Western merchants.

Other Players

The First Data deal is about capability becoming available. But it takes additional work for merchants and travel companies to actively start taking payments.

The payment service provider that claims to have the most Chinese travelers in North America actually paying today with Alipay and Weixin Pay is Citcon, a San Francisco startup that launched services last year.

About 3,000 merchants — including more than 200 high-end retail stores, restaurants, and attractions run by Caesars Entertainment in Las Vegas and Reno — are accepting payments today thanks to Citcon’s systems.

The startup said about 10,000 merchants have signed up for its marketing and payment tools for online and in-person sales.

As with all such vendors, onboarding isn’t instantaneous. After merchants enroll, the company typically sends out teams to help train sales clerks in how to accept the mobile payments.

Key clients — which are counted in the group of 3,000 merchants — include concessionaires and duty-free retailers, such as DFS Group (Duty Free Shoppers) backed by LVMH (Moët Hennessy Louis Vuitton); DFA (Duty Free Americas); International Shoppes; and Pacific Gateway, at nine North American airports.

‘China-Ready Businesses’

Alipay and Tencent are assertively recruiting travel companies, among other merchants, to accept them as a payment option.

For example, KLM Royal Dutch Airlines received about 7,000 messages per week on WeChat last year. About 30 percent of its Chinese customers are already using an option to pay for flights via Weixin Pay, a feature that the airline added in August 2017, as noted in the Skift Research report The State of Consumer Payments in Travel 2017.

“Catering to the needs of the wealthy Chinese outbound traveler can be a very profitable move for travel companies seeking to attract a larger Chinese audience,” according to the Skift Research report. “With a currently low acceptance of Alipay and WeChat throughout most of the Western world, early adopters can leverage the acceptance to attract the Chinese outbound traveler.”