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Tencent's WeChat Pay to be launched in Europe

A WeChat Pay system is demonstrated at a canteen in Guangzhou, China, on May 9, 2017. Photo: Reuters 

Chinese technology giant Tencent has signed an agreement with Wirecard, a Germany-based payment service provider, to launch its WeChat Pay mobile payment service in Europe.

Wirecard will enable European retailers to accept WeChat Pay as a mobile payment option in November, a leading Chinese mobile payment solution which has over 600 million active users in its home market.

During the payment process, Wirecard acts as the acquiring bank, bundles all the transactions for the respective retailers and processes together via the collecting model, according to a statement Wirecard published on its official website on Monday.

"As the Chinese are generally more accustomed to mobile payments than to card payments, European retailers can further drive their business by offering Chinese visitors their preferred payment method," said the statement.

"We are proud to be one of the first WeChat Pay partners for POS acceptance in Europe. This collaboration is an additional step for us to offer retailers a whole range of alternative and classical payment methods with just one interface where other payment methods can be added regularly. Thanks to our ConnectedPOS platform we are able to integrate them with minimal intervention in the existing cash register. We are looking forward to expand our business and to offer WeChat Pay for customers all over Europe," said Jörn Leogrande, executive vice president of Mobile Services at Wirecard.

Europe is one of the top destinations for the Chinese tourists, and every Chinese visitor spends about 3,000 euros on average when travelling there. The Chinese tourists were the highest spending in 2016, splashing a total of $261 billion abroad, according to the United Nations World Tourism Organization.

The Chinese consumers are also very used to using mobile payment services like WeChat Pay for everything from ride-hailing services to shopping. When they go abroad, they want these same services.

Although WeChat Pay's foray into Europe will hardly pose a big challenge to the presence of Apple Pay and Samsung Pay in Europe, it will lead to a direct rivalry with Alibaba's Alipay, which launched in Europe in 2015 in partnership with Wirecard.

The deal between Tencent and Wirecard is the latest in a number of agreements signed by China's leading mobile payment companies to expand their presence overseas.

In the US, Silicon Valley startup Stripe has partnered with Alipay and WeChat Pay to enable the American merchants using its platform globally to accept payments from the Chinese consumers.

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