Alipay, one of the world’s most successful mobile and online payment platforms, operated by Ant Financial Services Group, has formed a partnership with Yahoo! Japan last Wednesday, in order to expand and promote their services and provide a cashless environment.
This opens up a large number of possibilities for visitors that are coming from China to see the beauty of the Japanese culture and nature, and who are used to the easy payment methods. Also, this can facilitate the development of business plans for local merchants in Japan who have been struggling in more rural parts of the country.
It will benefit both Yahoo! Japan and Ant Financial Services Group. All travelers that use mobile payment platforms in their own countries can now expand those features in Japan as well. That is a big step for international marketing that helps connect people.
Ant Financial Services Group is an affiliate company of the Chinese Alibaba Group established in February 2004. It has over 870 million active users. It is the most valued fintech company in the world that provides smartphone users with a payment method for local in-store purchases via the Alipay Wallet app. The Alipay app also provides features for paying bills as well as bank account management, food ordering, bus ticket purchases, and more.
Over 300 financial institutions worldwide are using Alipay to connect with consumers in China directly and ensure cross-border payments. The Alipay Wallet app supports 27 currencies.
Ant Financial also announced their collaboration with regional banks in Japan, which allows mobile users to pay their bills by scanning QR codes. So far, we don’t know the exact number of regional banks they signed contracts with. But these kinds of agreements are vital to Alipay’s growth, said Toyohito Tanaka, the chief operating officer of Ant Financial Japan.
Specific collaborations with regional banks, such as the Kyoto Shinkin Bank and Hida Credit Union, have allowed Alipay to make its payment services accessible in the more suburban areas and places of tourist attraction.
Some Japanese banks (traditional financial services) view Alipay as their rival. They are not pleased with the continuous economic growth of China and their e-commerce branch overtaking the market.
But Eric Jing, CEO of Ant Financial has a different perspective. “We want to partner with Japan to help attract not just Chinese travelers but also mobile payment users from other countries”. “It is more effective to partner with Japanese companies and become a trusted partner of the Japanese community”, Tanaka added.
Yahoo! Japan said that the company will provide smartphone payment services based on Alipay. This means that customers from China who visit Japan will have access to easy mobile payment services provided by Yahoo! as well.
Currently, Alipay’s business network is present in 40 countries, and they’re investing in local e-commerce companies in nine Asian countries. Those companies have their own brands, but they all share technology with Ant Financial. Executives hope that, in the future, users from these countries will be able to make online payments through smartphones in shops that use the Alipay QR code system.
Chinese tourists spent over US $258 billion in 2017, including about 1.6 trillion yen spent in Japan.
The easy-access cashless environment for tourists visiting Japan
Tourism plays an important role in Japan. The number of Chinese tourists visiting Japan is continuously rising year after year. Over 7.35 million people visited Japan in 2017. And that number will go up thanks to the Olympic Games that are being held in Tokyo in 2020.
With so many tourists arriving in Japan, it’s essential to ensure online payment methods which are far more flexible and easier than physical currencies. Provided by Alipay, and partnered with Yahoo! Japan, these payments will ensure smooth transactions between Chinese tourists and Japan’s merchants and make a versatile environment with an easy-access cashless payment method throughout the country.
Eric Jing, Executive Chairman and CEO of Ant Financial Services Group, said that Alipay is dedicated to improving user experience and creating value for small businesses. The Tokyo Olympics are coming and all the attractions that they will bring is a good business target for Alipay.
Both parties want to ensure that their platform connects inbound visitors and local merchants in Japan seamlessly. Collaboration is important for partners who are located in the metropolitan areas and big cities, but it is also important in the smaller cities with popular tourist attractions. Ant Financial is looking forward to working with different Japanese partners in hope of achieving this goal. By doing so, they want to contribute to the evolution of the local economy of different areas across the country.
According to the United Nations World Tourism Organisation, Tourism Barometer, Chinese tourists are at the peak of consumerism, with over US $258 billion spent in 2017. That is one-fifth of what the entire world spends on tourism.
About 1.6 trillion yen are spent in Japan by Chinese visitors. Alipay Japan CEO, Makoto Koyama, said that “Japan can triple or quadruple inbound spending by Chinese tourists”. These numbers are not to be overlooked. They show just how much Alipay can contribute to Japan’s tourism.
What does this mean for the worldwide market? Well, with the continuing progression of the financial technology (fintech) industry, we might witness a global cashless payment platform overtake the physical currency. With a flexible environment surrounding this payment method, the possibilities of reducing the costs, efficiently managing finances, and overseeing financial decisions overall, the Ant Financial Services Group is establishing its role as an industry giant.
The partnership with Yahoo! Japan is certainly a big deal that brings a lot of opportunities, and we can expect many more collaborations of this kind in the future.