Alipay, one of China’s dominant digital payments providers, has teamed up with Russian internet firm Mail.ru in an e-wallet joint venture to develop digital payments in the country.
The joint venture is Alipay’s first outside Asia, where it already partners with local e-wallet providers such as Hong Kong’s AlipayHK, Indonesia’s Dana, and Malaysia’s Touch ‘n Go. Alipay is operated by Ant Financial, the financial affiliate of Alibaba Group, the parent company of the South China Morning Post.
Mail.ru will take a 40 per cent stake in the venture, making it the largest shareholder. Apart from Alipay, other partners include Russia’s sovereign wealth fund Russian Direct Investment Fund (RDIF), mobile operator MegaFon and Russian international holding company USM.
“The new joint venture for payments will work to accelerate the development of Russia’s digital economy by upgrading the country’s digital payment services,” Mail.ru said in a filing to the London Stock Exchange.
Alipay, which has ramped up its international efforts in digital payments in recent years, said it looked forward to working with its Russian partner to “benefit more individuals as well as small and micro businesses together.”
The digital payments venture comes on the back of a separate joint venture for AliExpress Russia with Mail.ru, as well as Alibaba, MegaFon, and RDIF, to promote e-commerce and launch a social commerce platform in Russia.
Mail.ru, which has over 100 million users, is the leading internet company in Russia. The country is also an important market in Alibaba’s globalisation strategy, according to a statement made by Alibaba chief executive Daniel Zhang.
Alipay as well as its rival, Tencent’s WeChat Pay, have both stepped up internationalisation efforts in recent years. In China, both companies have over 90 per cent penetration rate among internet users, according to a 2018 report on China’s third-party mobile payments market by research firm Ipsos.
Efforts range from encouraging overseas merchants to accept Alipay and WeChat Pay as a payment method for Chinese tourists, as well as setting up local wallets in markets like Hong Kong.
Alipay in particular has expanded rapidly in Southeast Asia, widely expected to be a strong growth market with more than 360 million internet users, most of whom go online using their mobile phones, according to a 2019 report by Google and Temasek Holdings on Southeast Asia’s internet economy.
(Source: South China Morning Post)