Cash Out: The new way to pay and why it's causing a stir.

These gateways are authorised by Alibaba, Tencent, and Union Pay to provides a cross-border payment solution for foreign businesses. Most of these payment gateways cover specific countries or regions, and some provide a one-stop-shop to leverage WeChat Payment, Alipay, Union Pay and more. 

These official payment partners have insider knowledge of the cross-border payment war among WeChat, Alipay, UnionPay and traditional banks. They deeply understand the payment war: the scale, policy, and the incentive offered to end users. 

We've gathered information from several payment partners to understand cross-border mobile payment.

Overview of mobile payment


The estimated annual third-party mobile payment transaction volume in Mainland China is RMB 152.77 trillion according to Ipsos 2018 Q4 Third-Party Mobile Payment User Report. The annual transaction number is 10.4 trillion, a 24% Year-To-Year increase. 

54% of user’s daily payment transactions happen via third-party payment providers such as WeChat and Alipay.

Source: Ispos 2018 Qtr 4 Third-Party mobile payment user report. Sample size: 2000

Notably, by December 2018 Union Pay’s mobile payment solution Quick Pay reached a user penetration of 18.0% with an estimated 190 million users. 

According to derived number from Alipay and Tenpay’s official statement, Tenpay recorded 460 billion annual transactions in 2018, while Alipay only recorded 197.5 billion transactions. Thus, Tenpay boasts an average daily transaction number of 1.2 billion, while Alipay only has 0.5 billion.

Source: Ispos 2018 Qtr 4 Third-Party mobile payment user report

WeChat and Alipay together have a 93.3% penetration of all the Mobile mobile payment population. Relatively WeChat pay has a larger penetration of 86.4% users, mostly due to the high usage of WeChat.

Source: Ispos 2018 Qtr 4 Third-Party mobile payment user report.

Sample size: 13,148

And here is the comparison of all mobile payment products in Mainland China:

Source: Ispos 2018 Qtr 4 Third-Party mobile payment user report.

Sample size: 13,148

Outside of Mainland China

According to one Rick (alias), the BD manager of a Shenzhen-listed cross-border payment provider, Alipay and WeChat cross-border’s daily transaction amount is between 500 to 600 million RMB.

Based on this number, the annual transaction volume amounts to around 200 billion RMB. Compared with the total mobile transaction volume within Mainland China (152,770 billion RMB), this is a mere 0.13% of the total transaction amount.

Rick also revealed that Alipay cross-border has around 1.5X more transaction volume compared to WeChat cross-border payment. This makes sense given the fact that Alipay was the first cross-border payment provider to enter most countries, and is launching aggressive promotion campaigns.

In terms of coverage: 

  • Alipay covers 54 countries and regions

  • WeChat Pay covers 17 currencies in 49 countries and regions 

“Alipay is a very strong first-mover in new markets. But WeChat Pay has huge potential to catch up because it’s just used a lot more frequently” says Flora Deng, the CEO of NihaoPay, a leading payment gateway company in the US.

The latest news in the cross-border payment industry


What inspired this article was Alibaba’s recent aggressive actions in the cross-border payment market area: 

  • Ant Financial’s $700 million acquisition of WorldFirst, a British payment group

  • Launching a marketing campaign to give away a huge prize “全球锦鲤” that encourages the usage of Alipay cross-border in over 20 countries


Ironically, WorldFirst was actually one of Jetek China Digital’s earliest clients. It is a private company that handles a huge amount of international transfers. In a note released in August 2018, it had transferred more than $95 billion for its 160,000 customers, with a GMV around $10 billion a year according to TechCrunch. 

It’s not the first time Alibaba Group acquires a payment company of this size. Actually, M&A was an essential tactic to build its overseas payment empire.


Tencent, on the other hand, seems to be a lot more conscious in its expansion outside mainland China: 

  • Launched a tax return mini program in over 81 airports

  • Launched WeChat red envelope campaign in Hong Kong (China) and Malaysia during the Chinese New Year 2019

  • Became the first mainland mobile payment provider with a financial license to provide payment solutions to the Hong Kong Special Administrative Region population

  • WeChat Pay collaborated with it’s messaging competitor Line in response to Alipay’s quick expansion in Japan


The cultural difference between Alipay and WeChat Pay:

Alibaba’s Culture: direct control over the payment operation.

By December 31st, 2018, Alipay claimed to have over 1 billion global active users. Its overseas operations may start with a collaboration with local payment agencies and banks, but they go way beyond that.

“Alipay tends to leverage its large user network to enter a new country”, Rick says, “but often completes its expansion by the merger and acquisition of a local payment company.” Alibaba has a culture of taking total operational control, while Tencent tends to be more willing to work with third-party payment partners.

Alipay cross-border team would offer overseas merchant preferred rate if the merchant directly collaborates with Alipay compared with working with third-party local payment providers. This put the payment providers at a disadvantage and they often could lose long-term clients with larger transaction volume (more sensitive to the transaction fees).

Rick says Alipay often also makes smaller payment partners sign a non-competition agreement, forcing the payment gateway to not provide WeChat payment. Several of Jetek China Digital’s European clients have to sign with 2 different payment gateway companies in order to integrate both WeChat and Alipay due to this non-competition agreement.

“Alibaba is good at taking actions that go beyond the current regulation. The acquisition of WorldFirst is the last piece of the puzzle of the B2B global trade supply chain. Alibaba already owns the logistic solution (Cainiao), and a sourcing platform (AliExpress), now it has the power of making international transfers for vendors” says Flora, “it also means Alibaba now possess a huge amount of data: how money flows across the world. Cross-border payment is just a small fraction of the payment business, the international transfers are the real deal.”

Tencent’s culture: collaboration with local payment agencies

 WeChat, on the other hand, strongly encourage merchants to work with payment agencies by giving the same rate to both agencies and merchants. In fact, merchants can even better deal with payment providers:

  • Faster payment account creation process, usually around 1 week (vs. 1-2 month working with Tencent)

  • Lower settlement amount ~ 1,000 USD (vs. 5,000 USD working with Tencent)

  • Flexible refund terms (limited to 24 hours with Tencent)

  • Multiple payment solutions, usually also including Alipay and Union Pay

  • This cultural difference was also confirmed by Beth (alias), our Hong Kong payment partner.

Tencent is also much more conservative in its overseas expansion:

Flora says: “Tencent tend to launch a service because there is a demand. It’s very careful of following the current regulation, and would only push a new service with the support of regulatory documentation. Alibaba, on the other hand, is a lot more aggressive. They invent solutions beyond the boundaries of current law. In many ways, Alibaba is pushing the local jurisdiction to make new laws.”

In terms of the range of companies that can create a cross-border payment account, WeChat is also more restrictive than Alibaba. According to Beth, WeChat cross-border payment has a positive list and only allows merchants from around 20 industries to create accounts. Alipay has a negative list of industries of merchants that cannot create cross-border payment account. Union pay accepts an even wider range of industries.

Illustration : Alexander Wells 

Offline before online

In Mainland China, the payment war started on the mobile phone 5 years ago (in the case of Tencent, mostly via the exchange of digital Red Packs during Chinese New Year) and extended to offline payment in the recent 2 years. On the other hand, in the cross-border payment war, offline is no-doubt the focus for both companies.

Both Alibaba and Tencent set their target to focus on expanding the offline mobile payment market. According to Beth (alias), here are some of the incentives payment companies offer to encourage offline payment:

  •  Alipay offers a 1% lower rate for offline merchants compared to online transactions

  • For WeChat, although the rate for online and offline are the same, WeChat would provide a lot more discounts to offline accounts

  • The discount and cash-back incentives apply only to offline payments

  • Alipay has its sales rep go door-to-door to sell its offline payment solution to merchants in Hong Kong, Japan, and Thailand