Western China Wal-Mart Stores Shun Alipay Amid WeChat Alliance
Tang Shihua
/SOURCE : Yicai
Western China Wal-Mart Stores Shun Alipay Amid WeChat Alliance

(Yicai Global) March 27 -- The fierce rivalry between China's two biggest third-party payment platforms, Alipay, owned by Ant Financial Services Group and Tencent Holdings Ltd.'s WeChat Pay, continues, with the latter inking an alliance with US supermarket giant Wal-Mart Stores Inc, resulting in some outlets in western China suspending the use of Alipay in-store.

Wal-Mart stores in western Yunnan, Guizhou and Sichuan provinces as well as Chongqing municipality have stopped accepting payments from Hangzhou-based Ant Financial, the fintech affiliate of Jack Ma's Alibaba Group Holdings Ltd., following an agreement with Tencent signed on March 15, Beijing Youth Daily reported.

Cashless payments are fast becoming the method of choice among consumers in China, driven by the convenience of using smartphones to carry out transactions. At least 40 percent of retail transactions in China are made through such platforms, said a report from Goldman Sachs report last August. The total value of third-party payment transactions soared 74 percent to USD11.4 trillion from 2010 through 2016. Although there are more than 260 companies licensed to operate third-party payment businesses in China, WeChat Pay and Alipay dominate the market. 

Wal-Mart China entered into a partnership with Tencent to develop Big Data-based targeted marketing on March 15, coinciding with the suspension of Alipay support in western China. The region represents one of Wal-Mart's five major operating areas and it operates more than 90 stores there.

The US firm's behavior damages the legitimate rights and interests of consumers to choose their own payment methods and affects the convenience of mobile payments, said Pan Helin, chief economist at the China Non-Performing Assets Industry Alliance, adding that the move may violate China's anti-monopoly laws and constitute unfair competition as well as infringe upon consumer protection law.

In addition to Wal-Mart, some shoppers at outlets of Better Life Commercial Chain Share Co., a major Chinese chain store, in China's central Hunan province reported they have been unable to pay for goods with Alipay for some time. Mobile payment users in several cities including provincial capital Changsha said that Better Life supermarkets no longer accept payment by Alipay.

Better Life stores are mainly located in the provinces of Hunan, Jiangxi, Sichuan and Guangxi as well as Chongqing, areas overlapping somewhat with those of Wal-Mart Western China operations.

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Keywords: Mobile Payment , Fintech , Wal-Mart , WECHAT PAY , Alipay , Exclusive Service