Alipay and WeChat Pay Partner QFPay Raises USD 20 Mn to Drive Payment Innovation
COVID-19 and China
Image credit QFPay official website

The payment aggregator QFPay (钱方好近) is refueled for innovation.

The Beijing-based payment service provider QFPay, which is also the biggest global partner of Alipay and WeChat Pay, closed a new round of funding worth USD 20 million on August 13.

Known for its QR code technology, the company has raised money from existing shareholders including Sequoia Capital China, Matrix Partners China and also three new financial backers -- MDI Ventures, Rakuten Capital and VentureSouq.

QFPay started its business in 2011, offering online-offline payment terminal and services to merchants.

Unlike third-party payment companies who compete fiercely and are thus highly unlikely to include each other in their own terminal, QFPay functions as a fourth-party service provider and has no conflict of interest. It has aggregated WeChat Pay, Alipay and other e-wallets adopted in Asian countries and regions into one offline point-of-sale (POS) terminal and a mobile app.

Imagine a visit to two convenience stores, one with 10 terminals of different mobile payment companies while the other has one aggregation device capable of scanning the user’s QR code and completing transactions across all the 10 e-wallets. Which one would the customer and merchant prefer? The second, for sure. That’s the value proposition of QFPay.

In addition to its payment aggregation device, QFPay also provides online marketing and food ordering services to its clients. The company claimed that it has served more than 1.2 million merchants and processed over CNY 1 billion worth of transactions.

In regions with low credit card penetration but sound Internet infrastructure, the mobile payment business has thrived and leapfrogged the credit card payment barrier.

With more than 700 million Alipay users and almost 1.1 billion WeChat users in China, plus users in other Asian countries where the mobile payment business is booming, QFPay is optimistic about the future market potential.

So far, the company has been expanding in 13 markets across Asia and the Middle East, including Cambodia, China, Hong Kong, Indonesia, Japan, South Korea, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and the United Arab Emirates.

After this round of investment, QFPay has recorded a total financing amount of USD 36.5 million. The company will continue to expand within and along its core markets and develop new digital payment products.

Another thing worth mentioning is the ongoing competition between Alipay and WeChat Pay in facial-recognition payment. The two giants are pushing aggressively in order to enhance their enterprise-facing business.

The facial recognition devices launched by Alipay (dubbed “Dragonfly 2.0”) and WeChat Pay (called “Frog Pro”) have attracted merchants in various offline consumption scenarios, such as convenience stores, supermarkets and hospitals.

Compared with integrated e-wallet QR code services, aggregation of facial recognition features might prove more difficult as the gathering of individual biological information is deemed more sensitive. If QFPay’s partners start to launch their unique facial recognition gadgets on a massive scale, it will put a dent in its comparative advantage.

At any rate, whether this pivot to facial recognition will deal a blow to/take a toll on the company’s business remains to be seen.

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