Alipay enters Australian market with Commonwealth Bank partnership

Alipay and Commonwealth Bank have signed an agreement that will see Alipay tapping the Australian market and CommBank business customers tapping Chinese tourists and students.

Alipay has entered into a memorandum of understanding with the Commonwealth Bank of Australia to deliver payment solutions to Australian and Chinese consumers and retailers.

Commonwealth Bank is the first Australian bank to secure a deal with Alipay, which means the payments service will be switched on in the country for the first time.

Under the agreement, Alipay will be able to use Commonwealth Bank's digital payments infrastructure to enable Australian consumers to make purchases across Alibaba Group's ecommerce websites including AliExpress.

Previously, Australian consumers using AliExpress, a platform for Chinese merchants to sell to global consumers, had to arrange foreign exchange.

The deal with Alipay will also allow Commonwealth Bank to target Chinese tourists -- about 19,000 Chinese tourists visit Australia every week and spend almost AU$8,000 per person -- as well as Chinese students living in Australia.

Specifically, Commonwealth Bank's business customers that use the Albert payment terminal will be able to accept payments from Chinese tourists and students who use Alipay.

Alipay, which is operated by Alibaba's financial services arm Ant Financial, has been partnering with organisations around the world like Uber to tap Chinese consumers during overseas travels.

Alipay has more than 450 million daily users globally that make 380 million payments every day through their mobile phones.

China recently dethroned the US as the world's largest market in mobile payments with a transaction volume of $235 billion. At the current growth rate, China is expected to process $6.3 trillion in mobile payments by 2020.

The partnership with Commonwealth Bank means Alipay will be able to expand its reach beyond China.

Australia is a major market for Alibaba, ranking as the fifth-biggest selling country in the company's Singles Day promotion, which the company deems to be the biggest online shopping event in the world. Alibaba also announced that it would be opening its first local office in Melbourne this year.

Recently, tech companies have aggressively rolled out their own version of mobile wallets around the world, three of the most notable being Apple Pay, Samsung Pay, and Android Pay.

Contactless payments have been well-received by Australian organisations, in line with suggestions that the nation is one of the first economies in the world to go cashless.

ANZ became the first major Australian bank to make Android Pay available and the only bank in Australia to make Apple Pay available to customers earlier this year.