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Mashreq widens Alipay options for rising number of Chinese tourists to the UAE

Mashreq Bank is expanding its partnership with Chinese mobile payments provider Alipay to 1,000 retailers within the next three months, from 150 now, as it seeks to capitalise on the influx of Chinese visitors.

In February, the Dubai-based lender entered into a tie-up with Alipay, which is one of the world’s largest online and mobile payment platforms with 600 million active users in China. The partnership with Mashreq enables Chinese customers to carry out payments at merchant outlets in the UAE using Alipay digital wallets on smartphones and tablets.

“I predict 20 to 25 per cent of all purchases made by Chinese visitors to the UAE in the next 12 months will be through Alipay,” Pankaj Kundra, head of payments at Mashreq Bank, told The National.

He declined to reveal the total value of Mashreq transactions using Alipay – saying only the figure is in the “tens of millions of dirhams” and that the volume of Alipay transactions in the UAE rose 16 times between April and the end of June.

Dubai is raising its profile in China to attract more tourists after their number surged 9 per cent in the first half of 2018 to 453,000 from the same period in 2017, according to figures from Dubai Tourism. The UAE introduced visa-on-arrival for Chinese nationals in 2016 to help boost tourism.

So far, 150 of Mashreq’s retail partners have been equipped with the technology to facilitate Alipay transactions, Mr Kundra said.

The bank has identified around 1,000 merchants it views as appealing to Chinese tourists – including fashion, luxury goods, jewellery brands and hotels – and aims to enable the remaining 85 per cent over the next two to three months.

Mr Kundra said he forecasts “significant exponential growth” in take-up of Alipay in the UAE over the coming months, especially as Mashreq ramps up efforts to market its Alipay partnership to Chinese visitors at Dubai airports and other locations.

“Earlier in the year, we realised that the Chinese are among the dominant nationalities visiting the UAE and their numbers are growing,” he said.

“With a high proportion of them opting to use mobile rather than card payment methods, it was imperative for us to embed our machines with the capability to give them the choice.”

Dubai organisations and companies are partnering with Chinese companies to facilitate their visit to the emirate.

Dubai Tourism signed an agreement with China’s internet giant Tencent – owner of messaging service WeChat – in May, to help promote the emirate as a destination of choice for Chinese tourists. It also has a partnership with Huawei, under which the smartphone manufacturer loads devices with cinematic content to market Dubai.

Though new to overseas markets, Chinese mobile payment brands are gaining popularity among Chinese tourists, many of whom use platforms such as Alipay back home.

A survey by research companies Nielsen in February found that 65 per cent of Chinese tourists said they used Alipay when travelling overseas, and 94 per cent said that if vendors and merchants in their destination countries offered them the option to use it, they would consider doing so.

In addition, 92 per cent of respondents said they would give “greater consideration” to retailers who accept Alipay, according to Nielsen.

A similar tie-up between Alipay and Middle East payment solutions firm Network International in July is “healthy competition” for Mashreq, said Mr Kundra. “Ultimately, it will expand the [mobile payments] ecosystem and that’s a good thing.”

Online payments in general are increasingly common in the region, which not so long ago prized “cash as king”. Around 40 per cent of all Mashreq’s credit card transactions are conducted online rather than in bricks-and-mortar stores, and the figure grew 65 per cent year-on-year in 2017, Mr Kundra said. The sector will continue to witness high double-digit growth over the next 12-24 months, he added.

Mashreq reported a 1 per cent increase in year-on-year net profit for the second quarter of 2018 to Dh563m.



Source: https://www.thenational.ae/business/banking/mashreq-widens-alipay-options-for-rising-number-of-chinese-tourists-to-the-uae-1.757220

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