NAB merchants score access to Alipay platform

Alipay has sealed its first deal with a major local institution after National Australia Bank agreed to link its network of 150,000 Eftpos terminals to the Chinese payments platform.

The tie-up will give NAB's large merchant customer base a first-mover advantage for accepting payments from the 1.7 million Chinese tourists and students who make transactions in Australia every year.

Alipay is the world's largest mobile payments platform, with more than 870 million account holders in China and India.

While Alipay is also negotiating deals to partner with other Australian banks, it is likely that only NAB merchants will be able to accept in-store mobile payments from Chinese visitors next year.

"We're definitely talking with other banks but the discussions are each at different stages," said Alipay's head of Australia and New Zealand, George Lawson.

NAB has already begun to pilot the Alipay offering with business customers and expects to extend the service across its merchant base before the end of March.

The Chinese visitor market is one of the booming segments in Australian payments, with 1.3 million tourists spending almost A$12 billion each year.

"By making China's number one payment method available to NAB business customers, we're enabling greater customer service and providing our business customers with access to this large tourism sector," said NAB's head of transaction services, Shane Conway.

Apart from giving its merchants first crack at Alipay's customer base, NAB is also aiming to consolidate its dominant role as a payments provider to the tertiary education sector.

There are more than 300,000 Chinese students enrolled in education institutions in Australia and their average annual spend is more than $90,000 per year. This makes the addition of Alipay a strategic value-add for NAB's 6000 merchants operating in the education industry.

Lawson said Chinese visitors to Australia accounted for 81 per cent of the growth in tourism spend in the last year.

NAB is expected to roll out additional mobile offerings next year to defend its leading positions in several payments markets.

A key theatre of battle is the lucrative health payments and claims market, in which NAB has held a stranglehold for several decades.

The bank plans to upgrade its HICAPS payments service to counter strategic challenges from new platforms launched recently by CBA and ANZ.