Dive Brief:

• iFresh, an Asian American grocery chain with several locations along the East Coast, now offers mobile payment through Alipay, according to a news release. The platform, operated by Chinese online retailer Alibaba and its Ant Financial Services Group, has more than 500 million users worldwide.
• The move is aimed at Chinese tourists visiting the U.S., who number 4 million each year, according to Alipay officials. “Many Chinese consumers shop at specialty grocery stores in the U.S. where they can find Asian foods and other products that may not be available at local supermarkets,” Souheil Badran, president of Alipay Americas said in a statement.
• Ant Financial broke into the U.S. market last year by partnering with routing technology provider First Data. Since then, it has forged deals with other payment companies, including JP Morgan Chase, and is available through select retailers.

Dive Insight:

The number of Chinese tourists visiting the U.S. each year is growing, giving retailers a compelling reason to adopt Alipay. The mobile payment platform should continue expanding in the U.S., and might even get a push for widespread adoption.

Could Alipay become a leading mobile payment option in the U.S.? It’s not a farfetched scenario. That industry has a lot of competitors and low penetration with American consumers. Although Apple Pay has been the strongest performer to date, no provider has won the market yet.

However, boosting adoption — and boosting adoption among non-Chinese consumers — will be a difficult task. Despite considerable investment from companies like Visa and Apple, mobile payment adoption has been slow to date, especially when compared to other countries. A tiny 0.5% of transactions made through Visa Inc.’s network comes through mobile wallets, watches and other “tokenized technologies,” Bloomberg recently noted.

This scenario actually favors a deep-pocketed competitor like Ant Financial. More than half a billion users worldwide currently use Alipay, meaning the service is highly effective and user-friendly. In Finland, consumers can pay for taxis, shop at department stores and buy airline tickets using the platform.

On the grocery side, Alipay is used at Alibaba’s cutting-edge Hema stores, where consumers scan products with their phones and choose to either have their selections delivered to their homes or bagged so they can take them home. Hema is seen by many as a glimpse of the future of food retailing.

Alipay could make a big splash if Alibaba makes a move into the U.S. retail market. Recent reports linked the e-tailer with Kroger — a move that would give Alibaba a massive brick-and-mortar presence and boost Kroger’s online and in-store technology.  

As companies like Walmart and Kroger move towards cashier-free checkout, digital coupons and other innovations, it’s clear there’s room for mobile payments to flourish. Alipay is at the forefront of this technology, and could make significant inroads in the U.S. in the months and years to come.