Alipay versus WeChat Pay: a battle between Chinese payment giants

Alipay and WeChat Pay are dominant players of the third-party mobile payment market in China, and had significant influence on shaping China’s digital and mobile payment industry. China’s third party mobile payment market had a total transaction value of RMB 12.8 trillion in Q4 2016, and shows signs of further growth, according to a report from Analysys.


Alipay is a third-party online payment platform, and was launched in China in 2004 through Taobao, the B2C platform of Alibaba Group, to facilitate payment. When a buyer purchases a product through Taobao and pays via Alipay, Alipay will hold the money paid by the buyer temporarily until the buyer confirms that the product was received in good condition. Only then will the money will be transferred to the seller’s Alipay account.

WeChat Pay

WeChat Pay is a digital wallet incorporated into China’s most popular chat app – WeChat. The feature was launched in 2013, allowing users to perform peer-to-peer transactions and mobile payments online and offline. WeChat Pay is Alipay’s greatest competitor, due to its traffic and social advantages. As a result, WeChat Pay was able to make progress in capturing market share by diving into social payments and offline retail.


In March 2017, Alipay had a market share of 54.7%, while Tenpay (includes both WeChat Pay and QQ Wallet) came in second with a market share of about 37%, according to a report from Analysys. Other players, including Apple Pay and Samsung Pay, took less than 10% of the market share combined.

Alipay had dominated China’s mobile payments for a long period of time, due to the dominance of the Taobao and T-Mall ecommerce platforms. In 2016, Alipay has 450 million verified users, and mobile payment accounted for 71% of total payment, an increase from 65% in 2015. However, Alipay’s share of the market has fallen to nearly half by the end of 2016 while WeChat Pay’s rose to more than a third, according to an article from the Financial Times. This is because more and more Chinese consumers are spending time in WeChat – purchasing products directly from brands’ WeChat Official Accounts, keeping money in their WeChat Wallet for peer-to-peer payments and to pay for products via WeChat Pay. Moreover, new features such as the WeChat Red Packet launched during the Lunar New Year in 2014 played a role in WeChat Pay’s continuous rise in market share.

While Alipay had higher transaction amounts, Tenpay had almost double the number of active users. In 2017, Tencent reported that WeChat had overtaken Alibaba with 600 milion active WeChat mobile payment users.


In 2013, Ant Financial (Alibaba’s payment affiliate) saw an opportunity in the amount of money held in their customers’ Alipay deposit accounts and launched the Yu’e Bao (余额宝) service. It is a money market fund for customers’ deposits in their Alipay accounts, and offers a higher interest rate than the deposit rates of bank accounts. Alibaba’s Yu’e Bao is now the world’s biggest money market fund, according to an article from Asia Times. Similarly, WeChat Pay allows users to store savings in a monetary fund from their deposit accounts in WeChat as well. This fund is known as Licaitong, and is managed by Huaxia Bank. However, Alipay is also integrated with other financial services offered by Ant Financial, such as insurance services (Zhong An), personal credit line (Ant Micro Loan), and digital banking (MyBank).

Alipay also has an e-commerce advantage due to its affiliation with Taobao. On the other hand, WeChat Pay is catching up via m-commerce through its in-app purchase functions, attracting both global brands and independent small shops alike. Consumers can also pay via WeChat Pay when shopping n Meilishuo, JD.com, Meituan, and 58.com. Both Alipay and WeChat Pay are widely accepted in shops in China for offline payment transactions, and for various services such as booking for a cab with Didi Chuxing, paying at gas stations and utilities, etc.

Alibaba’s e-commerce platforms do not accept WeChat Pay, giving Alipay a strong edge over WeChat Pay for e-commerce transactions. Conversely, WeChat has also shut down Alibaba’s apps and services, such that users cannot directly share content from those apps directly with their WeChat friends, according to an article from TechInAsia.


While Alipay still dominates the online payment market in China, we can see that its lead over WeChat Pay has been narrowing over the years. Both payment agents have their own strengths over the other. While Alipay stands to enjoy advantages from Ant Financial’s other financial services, and its affiliation with Taobao, WeChat Pay enjoys benefits from its community of users, and its various features that has gained popularity amongst brands and users alike.

Given Alipay’s and WeChat Pay’s’ solid standing in China’s mobile payment market, perhaps what we ought to keep a look out for is their battle for Chinese tourists’ mobile payments internationally.

  About FOMO Pay Pte. Ltd

FOMO Pay is the first authorized WeChat Pay & Baidu Wallet partner in Southeast Asia, and was selected as one of the TOP 100 Asian Companies by E27, TOP 100 Startups by Red Herring Asia, and Top 8 by DBS’ FinTech Accelerator Program. FOMO Pay provides a one-stop solution for local merchants by facilitating payment collection from the China market, including Chinese tourists. This comprises of online/offline Chinese payment modes, such as WeChat Pay, Alipay and Union Pay. FOMO Pay’s business solution serves clients from a wide range of industries, including the telecom, publishing, tourism and hospitality, F&B, education and retail industries.