First Data brings Alipay to U.S. merchants

On May 8, 2017, First Data Corp. expanded its relationship with Alipay, becoming the first payments technology company to implement Alipay at the POS for U.S. businesses on a scalable basis. Following a successful pilot in California and New York, First Data will now embark on initial rollout of Alipay at U.S.-based First Data Clover-direct merchant locations. This is expected to take four to five months to complete.

"As Alipay's popularity continues to spread beyond China, we are thrilled that Alipay chose First Data to support its acceptance for American businesses of all sizes," said Frank Bisignano, Chairman and Chief Executive Officer at First Data. Alipay, owned by Ant Financial Services Group, with an estimated 450 million registered users ranks second behind PayPal in number of mobile wallet users.

At this point, the new payment option will primarily target the 4 million Chinese tourists who visit the states each year. "Since launching at the point of sale in the U.S. last year, we have become the connection between the North American retail industry and Chinese consumers by delivering a seamless, hassle-free and cashless experience," said Souheil Badran, President of Alipay North America.

In partnering with First Data, Alipay broadens geographic coverage for its core users. "We will continue to focus on the retail, travel, experience and food segments, but our goal is to have relevant ubiquity as Alipay has evolved from a digital wallet into a lifestyle enabler for Chinese consumers and travelers who are now able to use Alipay to quickly transfer money, call a cab, book a hotel, buy movie tickets, or discover nearby shops and restaurants," Badran stated.

Acculynk the vital link

In the arrangement with First Data, Alipay transactions will be routed through Acculynk's True Debit Gateway, which enables least-cost debit routing to help reduce costs for merchants. First Data acquired Acculynk in March 2017.

Chinese consumers in the United States will be able to scan Alipay 19 to 30 digit quick-response (QR) codes at Clover-equipped terminals to execute purchases. "Acculynk captures the QR code and the Clover transaction ID," said Ashish Bahl, founder and CEO of Acculynk. "It maps the QR code to the transaction ID, sends it back for authorization, and at that point money flows from Alipay to First Data, and First Data funds the merchant."

Acculynk's role in connecting new payment types is a critical one. "We're the gateway, the bridge for the transaction, and the reason this is relevant for First Data and Acculynk is that Acculynk has been a very effective and efficient gateway to open up Rupay in India; Evertec in Puerto Rico; and UnionPay, which is a debit network in China," Bahl said. "It's a way that debit transactions can flow into First Data's merchants."

He pointed out that while Alipay transactions are not debit transactions, it offers yet another payment type, and Acculynk's goal is to open up a number of payment options previously inaccessible to most merchants. "Merchants obviously like that because they don't have to do a ton of work on the front end," Bahl said. "They get to interface with more consumers and ultimately see a revenue lift from incremental transactions."

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