Ant Financial, the company that owns Alipay, announced on September 5th, 2018, that it will collaborate with a wide range of local Japanese partners, including Yahoo Japan, to help build a cashless environment for tourists coming to Japan, in time for the Tokyo Olympic Games in 2020. In a press release, Alipay said that by collaborating with Japanese partners, it will enable a large number of visitors from China to experience easy payment methods while generating more revenue for Japanese merchants.
“Alipay is dedicated to enhancing user experience and creating value for small and micro businesses through technology,” said Eric Jing, executive chairman and CEO of Ant Financial. The Tokyo Olympics and the hike in visitors that this will bring is a good target for us, to ensure that the Alipay platform is the bridge between inbound visitors and local merchants here in Japan.”
Alipay Japan CEO Makoto Koyama added that Japan can attract far more Chinese tourists than it does now. In 2017, Japan drew 7.3 million tourists, a mere five percent of the 130 million Chinese who travelled abroad. Those that did travel to Japan spent a total of 1.6 trillion yen ($14.4 billion) compared to the 29 trillion yen that Chinese tourists spent as a whole. Koyama believes that the number has the potential to triple or even quadruple.
Alipay said that the consumption on each Chinese Alipay user in Japan from July to the end of August reached close to $569, a 52% increase from the prior year, with the total transaction volume growing by 165%.
Alipay’s Partnership with Yahoo Japan
Yahoo Japan said in July that it will start a mobile payment service based on Alipay this autumn. The company says that the shops that accept Yahoo mobile payments can also accept Alipay. Both Yahoo Japan and Alibaba are affiliated with SoftBank Group. Credit unions, like Ant Financial partner Hidashin Bank, stand to benefit from Alipay’s partnership, as it can ease the pressure by providing a cashless payment platform that many local shops and hotels lack. An implementation of a digital payment platform could help the local tourism industry take full advantage of tourists sites, like the World Heritage site in Takayama.
While Alipay, and mobile payments in general, have taken China by storm, it has yet to attract a similar following in Japan, where credit cards like Visa, Mastercard, and JCB are still widely used, and some banks view Alipay as a rival. It is hoped that with Alipay’s partnership with Yahoo, travelers from its 40-country-strong network will be able to make payments with their smartphones at shops that use their QR code system.
The Bottom Line
The Land of the Rising Sun has not taken to mobile payments as readily as other countries, but Ant Financial, a company based in a country that has, hopes to bring its mobile payments know how to bolster Japan’s industries and tourist revenue, especially now with the 2020 Olympics not too far away. Alipay’s partnerships with local Japanese merchants and with Yahoo Japan hope to make transactions easier for tourists from mobile-payment friendly countries like China, thereby encouraging tourism and boosting transactions. Alipay’s move into Japan just represents another move for them trying to take mobile payments beyond China.