Ant Group, Mastercard, e-wallets launch International Consumer Friendly Zones program in Shanghai to drive inbound tourism to China

Rhea-AI Summary

Ant Group and Mastercard have launched the International Consumer Friendly Zones program in Shanghai to enhance the payment experience for international visitors and stimulate local business growth. The initiative, supported by local authorities, covers major travel spots and commercial areas, including Shanghai’s airports, high-speed railway stations, and a 25,000-strong taxi fleet. The program will expand to 16 major Chinese cities following its launch in Beijing, Guangzhou, and Shanghai.

International visitors can now use two digital payment alternatives from Ant Group, binding major global bank cards to the Alipay app or using Alipay+ e-wallet solutions. Alipay+ supports 12 e-wallets across Asia, usable in an 80-million-merchant network in China. The program saw a 13-fold increase in spending by international visitors in Shanghai from January to April. Ant Group and Mastercard aim to further integrate more payment options and enhance the user experience.

Positive

• The program enhances the payment experience for international visitors.
• Supported by local governments and authorities.
• Covers major travel and commercial spots, including airports and taxis.
• Expands to 16 major Chinese cities.
• Two digital payment options available for foreign visitors.
• Supports major international bank cards and 12 leading e-wallets.
• 80-million-merchant network in China.
• 13-fold increase in spending by international visitors in Shanghai from January to April.
• Future expansion to integrate more payment options.

Negative

• High dependency on international tourists for the program's success.
• Program success heavily tied to the recovery of international travel to China.
• Potential technological challenges in integrating more payment options.

Insights

Market Research Analyst

The launch of the International Consumer Friendly Zones program in Shanghai by Ant Group and Mastercard is a strategic move aimed at enhancing the travel experience for international visitors. This initiative aligns with the ongoing recovery of international inbound tourism to China, which had been significantly disrupted by the global pandemic. By focusing on iconic travel spots, commercial areas, airports and taxis, the program is designed to provide a seamless and user-friendly payment experience for tourists.

From a market perspective, this initiative has several potential benefits. Firstly, it simplifies the payment process for international visitors, removing barriers such as the need for a local bank account or phone number. This ease of use is likely to encourage more spending by tourists, thereby stimulating local businesses. According to the release, spending by international visitors in Shanghai via Ant Group's digital payment options has already increased 13 times on a year-on-year basis between January and April. This is a significant indicator of the program's impact.

Additionally, the program's planned expansion to 16 major Chinese cities further underscores its potential to drive substantial economic benefits. As tourism continues to recover, we can expect a positive feedback loop where increased tourist spending boosts local businesses, which in turn makes these destinations more attractive to visitors.

However, there are also risks and challenges. The success of this initiative depends on the seamless integration of various payment platforms and the adaptability of merchants to new technologies. There could be teething problems in the initial stages and consumer adaptation might take time. Nevertheless, given the strategic importance of tourism for China's economy, this initiative appears well-placed to capitalize on the recovering travel sector.

Financial Analyst

From a financial perspective, the collaboration between Ant Group and Mastercard to launch the International Consumer Friendly Zones program is a noteworthy development. This strategic alliance not only enhances the payment experience for international tourists but also holds promise for significant revenue generation for both companies. By integrating major international bank cards and e-wallets into the Alipay ecosystem, Ant Group expands its market reach and diversifies its revenue streams.

The increase in tourist spending via Ant Group's digital payment options by 13 times year-on-year signifies a substantial growth potential. This surge in usage is likely to translate into higher transaction volumes and increased fee revenue for Ant Group. Mastercard, on the other hand, benefits from increased card transaction volumes and expanded acceptance network, which can drive higher interchange fees and cross-border transaction revenues.

Furthermore, the broader roll-out of this program to 16 major Chinese cities presents an opportunity for sustained long-term growth. The ability to capture a significant share of the inbound tourist market can lead to a robust revenue stream for both Ant Group and Mastercard. This initiative also strengthens their competitive position in the digital payments landscape, particularly in a market as critical as China.

However, financial analysts should monitor certain risks: the implementation costs of the program, potential regulatory challenges and the competitive response from other payment providers. Additionally, the long-term success of the initiative will depend on the continuous enhancement of payment technologies and user experience to maintain customer satisfaction and loyalty.

• Program to support iconic travels spots, commercial areas, airports, taxis in Shanghai in enhancing payment experience for international visitors
• Program on track to be rolled out to 16 major Chinese cities following launches in Beijing, Guangzhou and Shanghai

SHANGHAI--(BUSINESS WIRE)-- Ant Group and Mastercard, along with 12 overseas payment partners of Alipay+ and other major international card organizations, have launched the International Consumer Friendly Zones program in Shanghai, expanding the partnership aimed at enhancing the travel experience for global travelers and stimulating growth for local businesses in China.

Alipay+ payment signage at a Shanghai restaurant near the Bund highlights Ant Group's digital payment options for international customers. (Photo: Business Wire)

With the support of relevant authorities and local governments, the program will see the participation of more than 20 primary shopping areas, renowned tourist attractions, both of Shanghai's international airports, key high-speed railway stations, and taxi services with a fleet of 25,000 vehicles in the city. Shanghai’s landmarks, including the Bund, the bustling Nanjing Road shopping district, and the iconic Oriental Pearl TV Tower, are also enlisted among the collaborative partners.

Ant Group now offers 2 digital payment alternatives for overseas visitors in China. Travelers can bind major international bank cards, including Visa, Mastercard, JCB, Discover®, and Diners Club International to an Alipay app to access a rich array of local Alipay services from shopping, dining, ride-hailing to public transportation while in the Chinese mainland, without needing a local bank account or phone number.

In addition, Alipay+, a suite of cross-border mobile payment and digitalization technology solutions under Ant International, enables overseas consumers to pay with their home e-wallets across China. Alipay+ now supports 12 leading e-wallets and payment apps in Asia for use across an 80-million-strong merchant network in China, including AlipayHK (Hong Kong SAR, China), Kaspi.kz (Kazakhstan), MPay (Macao SAR, China), Touch 'n Go eWallet (Malaysia), Hipay (Mongolia), NayaPay (Pakistan), Changi Pay (Singapore), OCBC Digital (Singapore), Kakao Pay (South Korea), Naver Pay (South Korea), Toss Pay (South Korea), TrueMoney (Thailand).

Following the initial rollout of the program in Beijing and subsequent expansion to Guangzhou in April, Ant Group has been working intimately with partners to improve the two digital payment options' accessibility and ease of use for international travelers. This includes bolstering bilingual assistance and providing detailed user manuals. In Shanghai, participating merchants will also enhance payment signage visibility to clearly inform customers about the array of digital payment methods supported by Ant Group.

Amid rising inbound travel, spending by international visitors to Shanghai via the two digital payment alternatives by Ant Group between January and April climbed 13 times on year.

“The introduction of the International Consumer Friendly Zones in Shanghai signifies a major advancement in our efforts to enrich inbound tourism experience and bolster local business, especially considering the city's critical role in China’s global interactions,” says Fu Lu, Director of Cross-border Business in Greater China, Ant Group. Going forward, Ant Group will integrate more card organizations and overseas digital wallets for utilization in China and introduce new joint user campaigns.

Mastercard remarks that it is a great pleasure to join the International Consumer Friendly Zones program, enabling foreign travelers to make seamless and safe payments, just like locals do. As international inbound traffic to China continues to recover, Mastercard looks forward to partnering with Ant Group to enhance inbound payment convenience, boost consumption and build a more inclusive payment ecosystem.

About Ant Group

Ant Group traces its roots back to Alipay, which was established in 2004 to create trust between online sellers and buyers. Over the years, Ant Group has grown to become one of the world's leading open Internet platforms. Through technological innovation, Ant Group supports its partners in providing inclusive, convenient digital life and digital financial services to consumers and SMEs. In addition, it has been introducing new technologies and products to support the digital transformation of industries and facilitate industrial collaboration. Working together with global partners, the company enables merchants and consumers to make and receive payments and remit around the world.

About Mastercard (NYSE: MA)

Mastercard is a global payments and technology company. We are committed to connecting and driving economic inclusion and digitization, making secure, convenient and smart payments accessible to anyone, anytime, anywhere. Based on secure data and networks, seamless collaboration and commitment, Mastercard's innovative technologies and solutions empower individuals, financial institutions, governments and businesses. The "DQ (Decency Quotient)" we advocate guides our words and deeds both inside and outside the company while driving the corporate culture. By connecting more than 210 countries and regions around the world, Mastercard continues to promote the sustainable development of the world and help everyone unlock their own "priceless" possibilities.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240531488965/en/

Media:

Martin Mou

mouxu.mx@antgroup.com

Source: Ant Group

FAQ

What is the International Consumer Friendly Zones program by Ant Group and Mastercard?

The program aims to enhance the payment experience for international visitors in Shanghai and other major Chinese cities.

Which cities are included in the International Consumer Friendly Zones program?

The program will roll out in 16 major Chinese cities, including Beijing, Guangzhou, and Shanghai.

What payment options are available to international visitors in Shanghai?

Visitors can use two digital payment options from Ant Group, binding major global bank cards to Alipay or using Alipay+ e-wallet solutions.

How many e-wallets are supported by Alipay+ in China?

Alipay+ supports 12 leading e-wallets across Asia, usable in an 80-million-merchant network in China.

How much has international visitor spending increased in Shanghai from January to April?

Spending by international visitors in Shanghai increased 13 times from January to April.

What areas in Shanghai are covered by the International Consumer Friendly Zones program?

The program covers major shopping areas, renowned tourist attractions, airports, high-speed railway stations, and a 25,000-vehicle taxi fleet in Shanghai.