Chinese companies like Alibaba, Tencent and UnionPay are increasingly dominating the digital payments scene as they expand their reach outside of China into the lucrative international market, according to a new study from Juniper Research.
The report – Strategies for Payment Providers: Opportunities, Risks & Competition 2017-2021 – forecasts digital payment transaction values to reach $5 trillion by 2021, up from $3.6 trillion this year, of which $3.4 trillion will come from sales outside mainland China, Juniper says.
The report, which identified a series of key strategic approaches for players across the digital payments market, argues that both Alibaba and Tencent are keen to capitalize on the growing spend by both Chinese tourists and immigrant workers, now worth over $200 billion per annum. Potential game-changing decisions are Alipay’s move to roll out in-store payments in Europe and Tencent’s efforts to deploy its WeChat wallet, which processed more than $1.2 trillion in domestic payments in 2016, across international markets.
Meanwhile, UnionPay is seeking to position itself as an alternative to Visa and Mastercard in a number of markets, notably Russia, said research author Dr Windsor Holden.
“UnionPay is struggling to gain domestic traction behind Alibaba’s Alipay, which is able to bypass UnionPay’s network when mobile payments are processed to offline merchants,” he said. “Hence its focus is increasingly on building traffic from cross-border and international transactions.”