Alipay+ doubles down on expansion

Written by Kapronasia || October 30 2023

The fragmentation of e-wallets in Asia poses a challenge for any company trying to build a payments rail that can work smoothly throughout the region. With the exception of China, where a duopoly of Alipay and Tenpay still prevails, most Asian countries have dozens, if not tens of dozens, of digital payment methods. This holds true for the richest countries in the region like Japan and Singapore, as well as developing nations in South and Southeast Asia. For this reason, we are carefully observing the progress of Ant Group’s Alipay+ initiative in the region to see if it can achieve a breakthrough.

In its mid-2010s heyday, Ant Group went on a shopping spree in Southeast Asia, investing in e-wallets in almost every country in the region. The unspoken objective was to build a foundation for an Ant-backed regional payments rail. The initiative lost momentum during China’s tech crackdown, however, and today, central bankers in Southeast Asia are the ones with the best chance of creating a regional payments rail with their respective QR code-based systems that enjoy strong state support.

Ant has pivoted to a less ambitious but more geographically diffuse strategy that focuses on resolving interoperability hiccups for e-wallets throughout Asia. When a merchant installs Alipay+, merchant’s customers can then pay for goods and services with any of the participating wallets in the ecosystem rather than having to ensure interoperability with the wallets one by one. The more wallets in the ecosystem, the better the value proposition becomes. Given how e-wallet consolidation has failed to materialize throughout Asia – with a few exceptions like the Gojek-Tokopedia merger – Ant is offering what it sees as an attractive alternative.

Ant makes money from Alipay+ by collecting a fee from each overseas transaction, from recurring merchant subscription fees and also by selling merchants marketing tools, such as reward programs and services to help companies to develop their own apps.

If more is better, then Alipay+ is doing pretty well. The platform has been steadily adding new participants since its launch in 2022. Ant says that outside of China, Alipay+ covers 5 million merchants in 56 markets, and works with over 20 mobile payment partners across Asia which together serve over 1.4 billion consumer accounts.

On September, 19 Ant announced that it was deepening connectivity between seven Asian e-wallets and merchants in the Chinese mainland. Users of mPay (Macao), Hipay (Mongolia), Changi Pay (Singapore), OCBC (Singapore), Naver Pay (South Korea), Toss Pay (South Korea) and TrueMoney (Thailand) can now use those wallets to pay for goods and services in the Chinese mainland.

Visitors to China often struggle to smoothly pay for transactions without Alipay or Tenpay on their smartphones, so this development could make it more convenient for users of the e-wallets above to travel to the country.

Separately, in early September, between Alipay+ reached an agreement with South Korea’s ZeroPay, facilitated by South Korean cross-border payments company ICB, expected to enable 1.7 million merchants in the country to accept cashless payments from more than 1.4 billion potential customers from China and Southeast Asia.

Additionally, Alipay+ recently signed an MoU with Sri Lanka’s national payment network LankaPay that will allow users of e-wallets within the Chinese company’s network from Hong Kong, the Philippines, Singapore, South Korea and Thailand to use cashless payments when they travel to Sri Lanka. The partnership will also enable Sri Lankans to use their LankaQR enabled apps to scan and pay at Alipay+ merchants globally when traveling overseas. By the end of 2024, all e-wallets supported by LankaPay will be accepted by the Alipay+ global merchant network.