Chances are that if you’ve been following how technology is changing how we pay for things; you’ve been looking at China. Payment platforms like Alipay and WeChat have created the image of a country where cash is scarce. And ever since the start of this year, Alipay has been slowly expanding its presence in Sri Lanka.
In case you’re lost, Alipay is a mobile payment platform by Ant Financial, which is an affiliate of Alibaba. In 2013, it overtook PayPal as the world’s largest mobile payment platform. Currently, it’s stated that it holds 54% of the US$5.5 trillion Chinese mobile payment market. Needless to say, Alipay is huge. But with WeChat Pay proving to be a fierce rival, the company is looking at expanding into new markets.
The partnerships Alipay has made in Sri Lanka
One of those markets has interestingly been Sri Lanka. Throughout this year, Alipay has been forming partnerships to expand its presence in Sri Lanka. The first of these was a partnership with Sampath Bank in February. Facilitated by Interblocks, the partnership allowed merchants to accept payments via Alipay. This could be done using th app or by integrating it into existing POS machines.
Commenting on this partnership, Ajith Salgado – CIO of Sampath Bank said, “This partnership offers the growing number of Chinese nationals visiting and residing in Sri Lanka a secure and convenient means to pay for their purchases in the island, thereby helping local merchants boost sales volumes and earn more.”
Fast forward to October and Alipay inked another partnership. This time it was in partnership with Flemingo Duty Free, Cargills Bank, and Supreme Paysez. This partnership introduced Alipay as a payment option at the Flemingo duty-free shops inside BIA. Additionally, this partnership allowed Flemingo to offer targeted shopping offers to Chinese travelers using the mobile payment platform.
Rajendra Theogarajah – MD/CEO of Cargills Bank commenting on this partnership said, “This is only the beginning of an island-wide roll-out strategy Cargills Bank has planned with Supreme Paysez where Alipay will be made available across businesses whether micro, SME or large and will actively support the country’s strategy to attract a large number of visitors from China.”
Finally, there’s its latest partnership with Dialog Axiata. The partnership, which was announced yesterday, will make the Alipay mobile wallet service available to eZ Cash merchants. According to Dialog, this would allow Alipay to leverage the network of eZ Cash retailers. Currently, Dialog states that this network has 20,000 retailers.
Sharing his thoughts, Supun Weerasinghe – CEO of Dialog Axiata said, “We are pleased to welcome Alipay and become the first mobile payment service provider to facilitate Alipay customers with their payments in Sri Lanka, eliminating the hassle of converting currency. As the digital payment landscape continues to grow rapidly in Sri Lanka, Dialog will further explore opportunities that strengthen our leadership in the space while expanding the larger payment ecosystem.”
But is Alipay looking at the Sri Lankan market?
The latest Payments Bulletin report by the Central Bank of Sri Lanka states, “Cash persists as the most popular payment mode in retail payments in Sri Lanka.” The same report also states that while 21 million debit cards are currently in use as of Q2 in 2018. Yet, there were only 14 million transactions by debit cards during that same time frame.
Yet, the report did show an increase in the volume and value of online payments. As of Q2 of 2018, there were 7 million online payments made, which were worth Rs. 657 billion. The report states that this growth, “may be due mainly to customer convenience, time-saving benefits and various promotional measures and awareness programs carried out by the banks to enhance the usage of Internet banking.”
As such, we can see that online payment methods are gaining popularity. However, at the moment, Sri Lanka is still a cash-based society. Even if this were to change overnight, we’d still be a tiny country with a meager population of only 21 million people. So why is Alipay actively expanding its presence here? Chinese tourists.
As China transforms into one of the world’s largest economies, its incomes are rising. As a result, its residents are traveling and spent $261.1 billion in 2016 alone. Just last year, Sri Lanka saw 268,000 visitors from China. This makes it the 2nd largest market for the Sri Lankan tourism industry. As such, it’s no surprise that the tourism industry is hoping to attract more visitors from China.
Similarly, from the comments by Alipay’s local partners, we can see that they wish to tap into this market as well. Similarly, Dr. Cherry Huang – Cross-border Business in South and Southeast Asia General Manager at Alipay commenting about their latest partnership said, “The partnership with Dialog will enable Alipay payment acceptance at a large base of local merchants, creating opportunities for local merchants to better target the large number of visiting Chinese tourists and expatriates living in Sri Lanka.”
Alipay has said similar statements about its other partnerships as well. Thus, while Sri Lanka is yet to mature and adopt mobile payments, China has already embraced it whole heartedly. With its people now traveling and spending more money abroad, this is likely the market that the company is hoping to capture.
Therefore, it might not be realistic to expect Alipay to be the savior that fixes our online payment woes. Yet, with the current political fiasco, we’re currently embroiled in, Alipay’s plans might become complicated as the tourism industry struggles with a tarnished reputation.