Alibaba's Alipay Takes on Apple and PayPal With U.S. Expansion (BABA, AAPL)

Alipay, the digital payment giant owned by Alibaba (BABA), is heading to the U.S. to take on the likes of PayPal (PYPL) and Apple (AAPL).

China’s leading mobile payment service, which boasts 450 million global active users, announced that it is teaming up with Atlanta-based credit card processing service First Data (FDC), in a deal designed to enable Chinese tourists to use Alipay’s mobile wallets across about four million U.S. stores.

“Our goal is to extend reliable payment services to the over four million Chinese consumers who visit North America every year,” said Souheil Badran, president at Alipay North America. “Extending our partnership with a premier partner like First Data provides the merchants with a seamless integration and access to consumers who want to continue paying with their lifestyle mobile app.”

Competition From the East

News of Alibaba’s foray into the U.S came shortly after the company’s Asian rival Tencent Holdings announced similar expansion plans. Tencent’s WeChat Pay platform, which closed in slightly on Alipay’s dominance in the Chinese mobile wallet market by increasing its market share to 37 percent in the fourth quarter of 2016, launched a partnership with Silicon Valley-based integrated mobile payment platform CitCon. Like Alipay, its objective is to support Chinese tourists in the U.S.

Earlier this year, First Data and Alipay tested Alipay’s mobile payment service in a number of specialty retail locations in California and New York. Aside from making online payments and money transfers, Alipay customers can also use the company’s mobile app to hail a taxi, book a hotel, buy movie tickets and make doctor appointments.

According to Juniper Research, more than 150 million people in the U.S. will make start making digital payments by the end of the year. Apple’s contactless payment offering is expected to be the most popular solution, followed by Samsung Pay (SSNLF) and Google’s (GOOG) Android Pay. (See also: The Digital Wallet and the Future of Payments.)

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