Alibaba Group Holding Ltd (NYSE:BABA) and First Data Corp (NYSE:FDC) have signed a deal to bring Alipay to the United States. Under the terms of the deal, Alipay will be accepted by 4 million U.S. merchants that use payments processor First Data, Bloomberg News reported.
“This will open up Alipay to where it’s truly ubiquitous across the United States and hopefully more countries later,” Alipay North America President Souheil Badran quoted as saying by Bloomberg. Alibaba “decided rather than trying to do it on our own, this is an ecosystem that we’re looking for a partner that can provide scale,” Badran added.
Alipay is a leader in the China’s mobile payment market. The company has been expanding its presence around the world to facilitate the millions of Chinese customers who travel abroad. The company’s mobile wallet is being accepted by more than 100,000 retailers in 70 international markets.
The deal will “put Alipay in the same league as Apple Pay in terms of acceptance,” according to Bloomberg. Apple’s mobile payments service can be used at 4.5 million stores in the U.S., the company’s Chief Executive Officer Tim Cook told analysts last week.
First Data is a provider of commerce technology and solutions for merchants, financial institutions, and card issuers. It operates a debit-card network, processes card transactions and provides merchants with fraud detection and data analytics services.
Before entering the deal, the company tested Alipay in a partnership with luxury stores in California and New York at the end of 2016. The trial “showed that it could work with those customers, but it could work on a greater scale,” said Dan Charron, head of First Data’s global business solutions segment. “But you don’t need to look at it as a U.S. or even a North America thing. You can look at it as a global thing,” Charron added.
Shares of First Data Corp (NYSE:FDC) were trading up 0.45% on Tuesday. The stock is up more than 17%.
Alibaba Group Holding Ltd (NYSE:BABA)’s stock has been performing well. The stock was up 2.30% in the morning trading session. Year-to-date, it is up over 36%.
