Alibaba - Alipay and Tencent's WeChat Pay have been already presented. There is no need to explain you what is the difference between both or even to tell you that they are competing in China but also on the international market.
They are starting to be more present around the world, in Europe, in USA or even in some places is South-East Asia. But today, let’s have a look at the situation of Alibaba around the world.
What is the situation of Alibaba in the international payment market?
It is not totally new but there is a confirmation about the intentions of Alibaba in the South East Asian countries as it was explained to you previously. Alibaba has recently done a great move in India. Indeed, they have invested 177 million USD in the Paytm company to be able to hold 40% and soon they will increase their holding to 62%. The competition on this market is quite fierce. Indeed, they have to face Amazon and the local leader Flipkart.
If you have never heard about Paytm, it is the largest mobile payment processor in India. It is a smart move from Alibaba because at the end of the year 2016, the Prime Minister of India decided to remove the bank note of 500 and 1000 rupee from the circulation. The base of this idea was to fight against corruption in the country, help it to move to the 21st century to force the citizens to use more and more bank and electronic payments.
Why has Alibaba invested in Paytm?
With the announcement of the Prime Minister, Jack Ma from Alibaba saw an opportunity that he could not miss. Moreover, if you have a look at the evolution of the monthly transaction volume, it has not stopped to increase since this announcement.
Before the announcement, Paytm was not very famous around the households. But since that breakdown, the company started to get more and more famous. They got 5 million new users between November 8th and November 21st! That means they got around 400,000 new users every day during this period and they reached 7 million transactions per day.
One more interesting fact about Paytm is that they do around 75% of their transactions with mobile phones (mainly with Android). That makes it even more interesting for Jack Ma and his Alipay.
Moreover, to keep its objective to reach the international market, Alibaba saw a great opportunity in India because they know that there is a huge opportunity with the development of the country. Knowing that the number of credits and saving cards are quite low. They can only increase with the economy of the country.
Another idea of this investment is also that Alibaba will have access to a new labor market with high potential. They have already put in action their knowledge to help develop Paytm and hire local highly skilled people to drive this project to success.
What could be the future for Alibaba and Tencent?
With this strategic investment in India, Alibaba – Alipay took a big step forward. Tencent will face a great challenge if they want to reach this market. As Alibaba did the first move by finding a very interesting opportunity, let’s see if Tencent's WeChat Pay will be able to find an opportunity/investment as good as Paytm and also if they will consider to target this market or not.
As you can see Alibaba keeps its internationalization by reaching new markets through different methods. We will wait for Tencent to make its move and see how they are going to react to this big news.
What is your next step?
If you use WeChat Pay or Alipay you will be able to use them out of China as well and who knows exactly where? But with their intensive actions to go international maybe in a few years you will be able to use it almost everywhere. If you want to have more information about this subject or even others, do not hesitate to contact us. Moreover, if you are interested to implement Alipay or WeChat Pay to your business we can also help you, do not hesitate to contact us.