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China’s Payment Giants will Struggle to Reach International Markets

The Chinese payments titans Alipay, China UnionPay (CUP) and WeChat Pay are sallying abroad, leveraging enormous scale in their home market and taking advantage of unfettered access to European, Japanese, North American and emerging markets.

Few initially national payment networks have attempted, much less succeeded in becoming genuinely global. Underscoring the point, Interac, Cartes Bancaires and BankAxept are the leading retail-payment networks in Canada, France and Norway, respectively. None has ambition or the ability to become multinational. American Express, Discover/Diners Club, JCB and PayPal are tier-two or aspiring global networks. Can any of the Chinese payments giants be more successful?

CUP’s a traditional card network cut from similar cloth to Mastercard and Visa. Since its 2002 inception it’s enjoyed a protected domestic card-network monopoly.  Alipay and WeChat Pay while also full-spectrum retail-payment systems, are of a different stripe. They launched as e-commerce and mobile-commerce systems on dominant tech platforms.

Alipay achieved critical mass providing payments on Alibaba, the world’s largest e-commerce marketplace, similarly to how PayPal amassed users on EBay. WeChat Pay use exploded within China’s largest chat network. In contrast, American tech titans such as Google, Apple, Facebook and Amazon use payments to enhance their multinational platforms and increase consumer engagement, but work with established payment networks.

Source: Payments Source

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