Two Chinese internet giants, Alibaba Group and WeChat, have a lock on Thailand's mobile third-party payment services for Chinese travellers as they strive to get a bigger slice of a market worth 500 billion baht a year.
Alibaba, through its Alipay system operated by affiliate Ant Financial, and China's smash-hit messaging app WeChat, via its WeChat Pay run by affiliate Tencent Group, enable Chinese travelling abroad to use apps to make payments in stores in Thailand by scanning a QR code from the user's mobile phone.
Customers can pay using their regular accounts in yuan, and the money arrives in their overseas accounts in the local currency. This means Chinese tourists do not need to exchange currency when abroad if all their transactions are electronic payments.
"The entry of the two Chinese giants should open opportunities for local mobile payment platforms expanding to overseas mobile payment platforms, through a collaboration with Alipay and WeChat Pay," said Pawoot Pongvitayapanu, a member of the Thailand E-payment Association.
Local players need to seek innovative on-demand services with distinctive features to attract Chinese consumers, he said. Thai banks face a loss of revenue from credit card transactions and foreign exchange rates, said Mr Pawoot.
Porameth Rungrongtanin, chief executive of Asset Bright Plc (ABC), a Thai real estate and e-commerce business, said the company is expanding into cross-border retail payment service offering clearing and settlement services.
"We are waiting for Bank of Thailand approval to provide cross-border retail payment service," Mr Porameth said.
ABC expects to enter into an agreement with Tencent by this year-end to support Chinese mobile-based cross-border payment services.
Xi Lingyuan, an executive of Tencent FIT International Payment Centre, said WeChat has 8.06 billion active users worldwide, 300 million of which use WeChat Pay.
Merchants in Thailand that want to sign up with WeChat Pay's system are required to install QR code scanning systems.
Mr Xi said Thailand is the most popular destination for Chinese tourists this year. Some 8 million Chinese tourists visited Thailand in 2015 spending 370 billion baht, with the figure expected to reach 10 million tourists spending 500 billion baht this year.
Chinese are one of the highest average spenders among nationalities visiting Thailand, which makes them an attractive target for malls, hotels, restaurants, private transport services and mobile payment services abroad, he said.
Chinese rely heavily on WeChat payments in everyday life -- to shop, pay for cabs and transfer money to others, said Mr Xi.
Mr Porameth said Chinese tourists spend on average 52,000 baht per visit.
Ant Financial has joined hands with seven companies in Thailand, including some mobile payment service providers, in a drive to tap the small and medium-sized enterprise segment.
Panthep Nilasinthop, senior vice-president of Total Access Communication, said his company, through its subsidiary Paysbuy, has entered into an agreement with Alipay to introduce the Paysbuy Alipay online-to-offline service, targeting Chinese tourists and expats living in Thailand.
The integration makes it easier for merchants and businesses to accept mobile payments for goods and services by Chinese customers in yuan.
The service is available at four branches of duty-free shop King Power, said Mr Panthep.
Saranrat Srichiraratana, general manager of TrueMoney Co, said his company joined with Alipay to cash in on booming overseas mobile payment services.
Alipay has over 450 million active users worldwide. It has over 70,000 retailers overseas including restaurants, shopping malls, duty-free shops and convenience stores, with 10,000 retailers in Thailand. TrueMoney expects 2,000 merchants to sign up for its service by this year-end, said Ms Saranrat.