Alipay To Begin Conquest Of Munich And Beyond

In two weeks, Chinese tourists landing at Munich Airport will be able to use coupons sent to them through their mobile devices by retailers in the terminals. They will get a notification, directions to the retailer with the coupon, then once they bring the item to the POS, have a bar code scanned without worrying over currency conversion.

Alipay, a mobile payment app run by Alibaba partner Ant Financial, will be accepted in all POS terminals run by German processor Wirecard, which struck a deal with the company that operates 69 shops inside the airport. Markus Eichinger, head of mobile services at Wirecard, which is acting as both acquiring bank and processor for Alipay, gave an interview to just after coming from the partnership’s final testing session.

“Alipay behaves not like a classic payment–It’s not an EMV payment, no PCI rules,” Eichinger said. “It’s completely different and offers way more options to integrate into the infrastructure, so for us Alipay behaves like a value-added service. We are able to deploy Alipay through our standard platforms for value-added services.”

Alipay officials have told media in the past that it is more than a payment service, that merchants aren’t begging for more payment options. They want more customers, and Alipay’s system of coupon delivery and push notifications from partner retailers helps deliver them. The most recent count of Alipay users is 450 million and its reach is increasingly global. In Europe it is striking deals with partners like Wirecard to spread its commercial wings.

From Wirecard’s Alipay sales page, the potential incremental revenue for European retailers is clear:

“China has the largest market of wealthy tourists. In 2013, approximately 1.7 million Chinese tourists visited Germany; in 2014 there were approximately 2 million tourists, and the numbers are on the increase. Europe is the second most popular travel destination of Chinese people and every tourist from China spends an average of $3,000 on their trip here. Chinese people make 67% of their luxury purchases abroad. More than 400 million Alipay app users and $165 billion spent on trips each year are promising opportunities for you to increase your turnover.”

Eichinger said Chinese consumers and European merchants – Alipay is also launching in Italy, U.K., France this summer – are clear winners in the Alipay expansion. Tourists can use the payment method they are most comfortable with, including all it does for them at home.

“All of the advantages of the Alipay wallet apply,” he said. “Merchant directions, merchant descriptions, special discounts, taxi ordering, Uber integration, all the benefits that Alipay has apply outside (China) as well now.

“For the merchant it’s a great benefit as well because they add a new payment method to their portfolio but most of the value for the merchant comes from the marketing channels Alipay offers them. If you as a European merchant want to sell goods to Chinese tourists the main goal should be to get on the shopping list that is usually being prepared when they book the trip. Chinese tourists usually know very well what they want to purchase and they’re just looking for the places to get it.

“So if you get a special discount while you’re still in China and now you are able to go directly to a merchant and buy the things it’s very likely you make the purchase. That’s why those advertising options are very attractive and in this respect it is not only a new payment method but also a new channel to the customer and that’s how we sell it.”

Eichinger said this integration is available wherever Wirecard does business. It recently entered North America with a purchase of Citi Prepaid Card Services.

“There is no limitation,” Eichinger said. “The strategy is definitely to open it up to other markets as well.”