The Silicon Valley online payments company Stripe announced today it has struck a deal with Alipay and WeChat Pay to open up its user base to the Chinese consumer market.
The deal connects stripe businesses in over 25 countries to 92 per cent of the US$5.5 trillion Chinese mobile wallet industry.
Across many cities in China, it is fairly pointless to build a company without Alipay or WeChat Pay integration. So, for Stripe users, this helps simplify the process of making sales in Asia’s most populous country.
The Chinese payment system, between WeChat Pay, Alipay and traditional services like UnionPay, is fairly insular and difficult to access for companies outside of the country (for example, when AliPay launches in foreign countries, it targets Chinese tourists, not locals).
This partnership opens up the market.
If we take Singapore as an example, it potentially could help facilitate international growth — which the government has built into its future economic plans. Singapore is a small market and most young startups look abroad almost immediately, so if they can gather momentum via WeChat (and convert sales fairly easily), that could be a game changer.
To give an idea as to why it would make such a difference, check out the following statistics.
- 71 per cent of Chinese e-commerce (which saw US$750 billion in sales in 2016) is on mobile
- That sales number is expected to double by 2020
- Online penetration of total retail in China is predicted to hit 25 per cent by 2020, per Goldman Sachs
“By deepening our existing partnership with Alipay, and launching a new partnership with WeChat Pay, we’re enabling businesses to easily access the once-impenetrable Chinese market, and in the manner Chinese consumers prefer,” said John Collison, president and co-founder of Stripe.
Users can simply integrate Stripe’s payment system (via its API called Sources) and they will have access to WeChat and Alipay users in China, while still receiving the payments in their local currency.
Stripe launches in Hong Kong
The company also announced today its services are now available in Hong Kong and companies there will get access to Stripe’s full stack.
Stripe also will let Hong Kong users to get paid in USD without losing money through conversion fees, a nice cost-reduction for companies that can fairly easily get paid in Hong Kong Dollars, Chines Yuan and other foreign currencies in the financial hub.
As it began the launch process, Stripe worked with the who’s who of local startups — Tink Labs, Grana, HBX and Klook — to receive feedback.