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Ant Financial’s acquisition of Moneygram fell apart when Washington intervened, and the offer of $1.2 Billion was withdrawn earlier this year. If the deal had gone through, it would have given Alipay access to 350,000 Moneygram outlets across the world.

With 66% of third party payments in China happening on Alipay and Wechat, both these firms are aggressively looking to expand their global footprint, and following Chinese tourists seem to be a low hanging fruit. But will it scale?

Mobile payments in China was estimated to be about $5.5 Trillion in 2016. In sheer size, that accounts for half the country’s GDP. Alipay and Wechat have about 600 Million and 800 Million users respectively. These numbers demonstrate the role that China plays in global payments, and if there is a worldwar happening in payments, it most certainly is local to China.

While Alipay had the head start in China payments, Wechat used the power of Social media to get ahead in terms of user base. Over the last year or so, both the firms have taken various approaches to expand globally. But more recently they seem to be settling on a strategy to follow Chinese tourists.

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Typically when firms look to expand beyond their home turf, they look at various strategies from a licensing/franchising model at the lower end of the spectrum, to a partnership model/joint venture or an acquisition. Early stage firms with low risk appetite or lesser access to capital tend to choose the lower end of the spectrum, where as firms with deeper pockets typically go down the M&A route. Many times, firms tend to go into a joint venture or partnership model with a view to doing an M&A deal down the line.

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Coming back to the tourist strategy; During the Chinese New Year, there were about 6.5 Million Chinese outbound tourists who on average spent $1500 per head – $9.75 Billion opportunity (just around the Chinese New Year) to go after. And with an already sticky consumer base, all these firms had to do was to find suitable partners globally to tap into this user base. That’s exactly what these firms have been doing.

Both Alipay and Wechat have recently signed partnerships with tax refund companies to enable Chinese tourists to obtain rebates on their purchases via their respective mobile apps. WeChat plans to offer in-store instant refunds for overseas tourists. Chinese tourists do not have to queue up in airports to get tax refunds and rebates on their overseas purchases.

Alipay have forged a partnership with Suntec city in Singapore that attracts roughly 3 Million Chinese tourists every year. Alipay touchpoints will be deployed in the Suntec  mall for Chinese visitors who are looking for the best of retail and lifestyle offerings. This is expected to be a very attractive proposition for retailers in Suntec City.

Alipay have been signing partnerships with various stakeholders from retail chains to banking giants in the US to expand aggressively. iFresh, a retail chain in the US that attracts Asian population have announced that they will allow customers to use Alipay in their retail and online stores.

North America attracted 4 Million Chinese tourists in 2017 and clearly a market Alipay are going after. They have signed Partnerships with JP Morgan Chase, Verifone and multiple other retailers to expand foot print into this region.

However, all these go-to-market strategies feel tactical and underwhelming for firms that do close to $3 Trillion worth of transactions between them every year. Sporadic regional partnerships to target Chinese tourists can be a low hanging fruit. But if China’s Amazon (Alibaba) and Facebook (Wechat) want to wage a war for the world, they might have to take an M&A route rather than partnerships. With the Moneygram deal falling apart, may be a Western Union deal is on the cards. Only time will tell.

Arunkumar Krishnakumar is a Fintech thought leader and an investor. 

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