An Alipay logo is seen at a cashier in Shanghai on January 12, 2017.  Photo: Reuters/Ali Song
An Alipay logo is seen at a cashier in Shanghai on January 12, 2017. Photo: Reuters/Ali Song

Japan, like many Asian countries, has historically been and continues to be a very cash-oriented society. Alibaba hopes that its mobile payment platform will become popular among Japanese consumers, as it has in China. Ant Financial, the operator of Alipay, is planning to bring the Alipay mobile payment platform to Japan under a new brand that will be connectable to Japanese bank accounts.

It’s a sharp break from the strategy Alipay has followed over the past year or so. Both Alipay and WeChat Pay have made it clear that targeting Chinese tourists abroad is their international focus, as opposed to popularizing usage among North American, European or Southeast Asian consumers.

However, Alipay has set up a joint venture with Malaysia’s Touch ‘n Go to bring a similar service there. The JV will be majority owned by Touch ‘n Go, which is in turn majority owned by the Malaysian CIMB Group. Unlike the Alipay move into Japan, it is largely based on the existing use of Touch ‘n Go payment cards now used primarily for fares and tolls.

Moreover, the move says a lot about where Ant Financial hopes to take Alipay in the future. In particular, it appears that Ant wants Alipay to become a staple payment method outside of China, and it illustrates the transformation of Alibaba from a primarily Chinese company into an increasingly internationally focused firm.

It’s impossible to say whether Alipay will prove popular in Japan. Cash use is still heavily preferred in that country. At the same time, Apple Pay has slowly grown in popularity because of the high ratio of Japanese consumers owning iPhones.

Nonetheless, cash use was still dominant in China only a few years ago, and mobile payment platforms, including Alipay, Android Pay and Apple Pay, could dramatically affect spending behavior in Japan like they have in China.

Alipay and other payment platforms have created a sort of consumer revolution in China over the past two or three years. Cash, rather than credit or debit cards, was definitely king, and it was not uncommon for car buyers to pay in full for new vehicles with bags of cash. A few years ago, David Schoch, then Ford vice-president and president of the company’s Asia-Pacific department, noted that 80% of its car sales in China were made entirely with cash.

Nowadays many Chinese retailers and shops expect customers to use Alipay or WeChat Pay, and likewise, many Chinese consumers expect to be able to use their preferred mobile payment platform wherever they go.

The exponential growth of outbound Chinese tourism is a major contributing factor behind the popularization of mobile payments abroad. It is also the primary cause of the interest by foreign firms and governments in partnering with Chinese mobile payment platforms. Such companies as BNP Paribas and Barclays and the government of Monaco have all signed agreements with Alipay, and this trend shows no signs of slowing down.

This article was originally published on Jing Travel.

Zara Hoffman

As an art enthusiast, covering the business of art and it's audiences, Zara has been involved in the art and business worlds for over 5 years. Born and raised in New York City, she graduated Cum Laude from the Macaulay Honors College of the City University of New York with a bachelor's degree in Arts Administration. During her study, Zara held internships at The Museum of Jewish Heritage, various auction houses and galleries, and most recently, in the Business Development department at artnet. Zara's...

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