With a growing demand for mobile payments, retailers around the world need to ensure that they remain competitive and up-to-date with the payments ecosystem. The mobile payments industry is a valuable customer segment, and with approximately RMB 22.59 trillion in processed mobile transactions (according to the People’s Bank of China), it is clear to a number of organisations that this market is not to be neglected.
WeChat payments (which are in essence the same payment technology as Tenpay) are becoming a popular payment method among Chinese consumers. Tencent Holdings Ltd has taken a leap to broaden its overseas mobile payment service offering, starting with Japan. From the 30th September 2015, Chinese travellers who are one of the 600 million WeChat users will be able to purchase goods at (initially) eight Daimaru Matsuzakaya departments stores across Japan including: Umeda, Shinsaibashi, Kyoto, Kobe, Tokyo, Sapporo, Nagoya and Ueno.
The medium term strategy of Tencent will be to partner with 10,000+ Japanese stores within three years. This move is likely to see Tencent and its partners see an influx of mobile transactions which will undoubtedly prove positive for both parties.
Tencent’s primary rival, Alibaba, has also responded similarly with plans to offer Alipay in 30,000 overseas stores across South Korea, Hong Kong and Singapore. Further plans to increase Alipay in 1 million stores has been set to take place over the next five years.
One of the challenges both Tencent and Alibaba face for the success of their mobile payment platforms overseas is UnionPay's current dominance in the overseas market. UnionPay has coverage in over 150 countries with over 13 million stores accepting the payment service. Both mobile platforms will need to have high overseas penetration rates if they are to flourish.