China payment wars heat up as WeChat Pay launches in Europe

Chinese internet giant Tencent launched its WeChat Pay payments service in Europe on Monday, challenging rival Alipay, which is owned by rival Alibaba’s affiliate Ant Financial.

Tencent has partnered with German payments firm Wirecard to allow European retailers to accept WeChat pay as a payment option.

As CNBC reports, the move is specifically aimed at Chinese tourists coming to Europe and is not necessarily a challenger to the likes of Apple Pay and Samsung Pay, both of which operate in parts of Europe. Chinese consumers are very used to using mobile payment services like WeChat Pay and when they go abroad, they want the same services. 

SafeCharge (LON:SCH) has recently announced partnership with Tencent to add WeChat Pay on its global payments platform.

Alipay, on the other hand, launched in Europe in 2015 and has since expanded to other destinations like South Africa. Tencent said that in China it has 600 million active users of WeChat Pay. Meanwhile, Alipay recently released numbers that put its active user number at 450 million people.

Markus Eichinger, executive vice president of global product strategy at Wirecard, gave an interview for CNBC ahead of the launch. Here’s what he shared with them:

Right now the problem is many Chinese travelers don’t have the right payment instruments. Shopping is a substantial part of the shopping journey. For every retailer targeting Chinese customers in the segment of luxury, of travel, of entertainment, this is a must-have payment option.

Wirecard was also the company that helped Alipay launch in Europe in 2015. It acts as an acquirer, essentially bundling all the transactions for a retailer and processing them. Wirecard said that the solution will be ready to go live from November.

Chinese tourists can open their WeChat wallet feature, show the barcode on their smartphone to the retailer, and the shop assistant will scan the code to activate the payment process.

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