Alibaba’s payment service comes to Europe

Alibaba's payment service launches in Europe
Alibaba's payment service launches in Europe

Alipay, the online payment service run by an affiliate of Alibaba, is being launched in Europe as the e-commerce giant looks to tap into the growing number of Chinese tourists coming to the continent.

Alipay is run by Ant Financial and allows people to pay for items in stores and online across China. Ant Financial has struck a deal with Wirecard, a German payment processing company, which will let merchants using Wirecard's point-of-sales terminals accept Chinese visitors' purchases made with Alipay.

Stores currently using Wirecard's technology will require a software update rather than a new machine and will scan a barcode on an Alipay user's smartphone to process a payment.

The Chinese are the top global spenders abroad and France, Italy and the U.K. are the countries in which foreign tourists spend the most money, according to Global Blue.

Zhang Peng | LightRocket | Getty Images

By making sure that its services are used by its 400 million active users, Alipay could also benefit merchants as they will offer a widely used and familiar payment method to Chinese consumer.

Wirecard has 21,000 merchants using its systems worldwide, though it does not break that down for Europe. But by partnering with Wirecard, Alipay will have access to a number of different stores across several industries, rather than attempting to sign deals with individual businesses.

The move marks the first major push by Alipay to bring its service to Europe amid a broader expansion by Alibaba into the region. Earlier this year, Alibaba appointed country managers to run its U.K. and Italian offices to help businesses sell into China.

Although Alipay's customer base is almost solely Chinese, the service is not yet a direct competitor to the likes of Apple Pay. But the move could lay the groundwork for a broader expansion of the service if it takes off.

"Our customers have very high trust in our brand as Alipay is an essential part of their daily life. We are therefore confident that many users will be using our new, convenient and cashless offer when travelling to Europe," Rita Liu, head of Europe for Alipay said in a press release.

Ant Financial said that it will look to expand the services it offers via Alipay such as including integrating the tax refund process.