Stripe Inks Deal in WeChat and Alipay
Recently, we’ve seen a lot about how Alipay is looking to expand its options in other countries, giving the newly-minted tourist class in China the opportunity to use a familiar mobile payment system while traveling abroad. We’ve seen Alipay strike deals on multiple continents, but now, it’s made one big push. It and one of its biggest competitors, WeChat, have set up a deal with Stripe to bring its mobile payment systems to anywhere Stripe is being used.
Under the terms of the deal, those who use Stripe as a payment processor will be able to process payments made through the two Chinese firms. WeChat and Alipay represent a substantial number of Chinese shoppers, much greater numbers at last report than those who turn to credit cards in China. Word from The Economist says that just 16 percent of Chinese citizens own a credit card to begin with, making potential access to this market difficult.
Now, however, American merchants—especially those with online components—have unprecedented access to a market that represents more than double the total United States market. With over 520 million Alipay users and over 600 million WeChat Pay users, it’s a major opportunity for American firms to offer goods and services to the growing Chinese market.
Many already do, as noted in a 2016 McKinsey report revealing almost one in five Chinese online shoppers are buying goods in other countries.
Given that a PwC consumer poll revealed that better than half of Chinese consumers would turn to online retailers overseas if there were better prices involved, there’s every reason to get American retailers in the China game.
Online shopping’s low overhead and access to goods makes it a great way to get into new markets, since the barriers to entry are so low. With a market of several hundred million people—even if there were total overlap between WeChat and Alipay users, we’d still be talking about a market almost double the size of the United States—there’s every reason to walk in.
The Stripe / Alipay / WeChat deal represents one huge new opportunity to get in perhaps the last great untapped market on Earth. Those who don’t have China in a marketing strategy will likely suffer for the loss, especially now that the payments can come so readily.