You can count international tax refunds as the latest service that Chinese giant Alibaba is expanding into. Alibaba-affiliated Ant Financial’s Alipay is now expanding its tax refund services to South Korea through an existing partnership with South Korean tax refund company Global Tax Free (GTF)—and the company is pledging to make it easier than ever to use for Chinese consumers.
Alipay, WeChat Pay, and incumbent UnionPay have long been in a three-way battle for Chinese payments overseas as they strive to become the payment method of choice among Chinese consumers—and particularly the richer Chinese consumers who regularly travel abroad. As a result, everything from overseas retailers, convenience stores, and airports have become battlegrounds as each payment method is trying to achieve the largest and most impactful global coverage.
For Alipay and WeChat Pay, it’s all about global coverage and customer convenience as their rivalry continues
The latest up-and-coming area Alipay and WeChat Pay are beginning to compete is in tax refunds. For China’s big-spending global travelers, tax refund services have become a natural part of international travel, and both Chinese mobile payment operators and tax refund firms are trying to innovate to win customers’ preference.
For Alipay, that means expanding its paperless and instantaneous tax refund service to South Korea, long a staple shopping destination for Chinese travelers. In essence, the service will allow Chinese travelers to use an app on their phone to claim tax refunds, and the only physical interaction needed to finalize the tax refunds is to scan one’s passport at a dedicated kiosk in the airport before leaving the country.
Alipay’s new tax refund service in South Korea pledges to be entirely paperless
The new service bears many similarities to the way Alipay tax refunds function in Singapore, where the company also partnered with Global Tax Free to roll out instant tax refunds.
Alipay has previously also partnered with market incumbent Global Blue to offer Alipay tax refunds to Chinese travelers in many European destinations.
“Since 2013, Alipay has continuously explored ways to expedite tax refunds for Chinese tourists to enhance the outbound travel experience. Alipay users can already receive tax refunds at more than 80 airports and a growing number of in-city shops globally after processing at a tax counter,” said Danny Chung, General Manager of Alipay Korea, in a press statement.
In terms of global coverage, tax refunds looks like a draw between the two companies for the time being
If that will be enough to convince consumers that Alipay is the superior mobile payments platform for Chinese travelers remains to be seen. Archrival WeChat Pay currently offers tax refunds at 77 airports in 19 countries and counting.
Fortunately, for consumers, it’s a rivalry that’s driving both overseas expansion and ease-of-use. That can only be good news for consumers and international retailers.