Online payments firm Stripe has struck a deal with two of China’s biggest mobile payments providers, effectively opening its clients to a huge, new market.
Stripe will now allow the hundreds of millions of users on Alipay and WeChat to pay on its platform.
With this deal, retailers who use Stripe to process payments will now be able to welcome Chinese shoppers onboard the majority of whom use the two Chinese platforms when they shop online. Far fewer use credit cards.
Alipay, the e-payment service owned by Alibaba’s Ant Financial, boasts over 520 million users and WeChat Pay, owned by Chinese internet giant Tencent, boasts over 600 million users.
Stripe, a 7-year-old Silicon Valley startup, has presences in nearly 25 countries, and earns by charging a fee on transactions processed through the Stripe platform, much like competitors such as Paypal and Square.
But unlike Paypal, consumers won’t notice Stripe at work. Merchants who use the service will be able to request Alipay and WeChat Pay support through Stripe’s interface.
The startup previously partnered with Alipay to offer its payment method to merchants in the U.S. in 2014. Stripe’s president, John Collison, said that the new global partnerships which would be first for WeChat Pay would enable businesses to access a “once-impenetrable” Chinese market, “in the manner the Chinese prefer.”
“We’re giving hundreds of millions of Chinese consumers access to some of the most exciting, fast-growing businesses around the world,” Souheil Badran, president of Alipay in North America, told Mashable.
Stripe just got itself a front-row seat to China’s online spending boom.
Access to Chinese consumers has been difficult for western retailers, because credit card usage remains low in the country. In 2014, only 16 percent of Chinese owned a credit card, according to the Economist.
Alipay and WeChat Pay, on the other hand, process huge volumes of transactions daily. Three-quarters of the $770 billion e-commerce market is done over mobile, with the vast majority of transactions going over the two platforms.
Nearly 20 percent of Chinese digital consumers now buy goods abroad, Badran told Mashable,citing a 2016 McKinsey consumer report.
A PwC consumer poll showed that over half of Chinese consumers would purchase from an online retailer overseas if they offered better prices.
“Chinese consumers are known to be savvy and increasingly interested in overseas products and services,” he said.
While Stripe won’t share user metrics, it believes that the partnership with Alipay and WeChat Pay will present “a significant growth opportunity” for Stripe-powered businesses.
“If you are an internet business, this unlocks a new vast customer base,” John Collison, Stripe’s president and co-founder, told Reuters.
“If we can help a business double their sales, then it doubles our revenue from that business.”
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