Astra Tech, the Dubai-based technology-focused investment company backed by Abu Dhabi's artificial intelligence company G42, has partnered with Alibaba’s global digital payment platform Ant Group to allow tourists to the UAE to shop and pay for services through their home e-wallets without worrying about foreign currency conversions.
The service, which integrates Ant Group’s Alipay cross-border digital payment platform with Astra Tech’s PayBy merchant network, will begin this month.
It will enable more than 1.4 billion wallet users to conduct seamless transactions in their home currencies for Abu Dhabi’s fleet of nearly 7,000 taxis as well as more than 3,000 retail merchants across the UAE, Astra Tech said on Monday.
“Our milestone collaboration with Alipay aligns perfectly with the UAE's commitment to enhancing the payment ecosystem and fostering a commerce-friendly environment,” said Abdallah Abu Sheikh, co-founder of Astra Tech and chief executive of Botim.
The new service will cater to tourists from countries including China, South Korea, the Philippines, Thailand, Malaysia, Singapore and Italy, among others, through their respective native e-wallets such as Alipay, MPay, Kakao Pay, GCash, TrueMoney and Tinaba.
The UAE, the Arab world’s second-largest economy, is investing heavily to expand its tourism sector.
In May, Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, said tourist spending in the country rose 70 per cent to Dh121 billion ($33 billion) in 2022, the highest in the region.
“We have set a target of reaching 40 million tourists within seven years and increasing the tourism sector's contribution to our GDP [gross domestic product] to Dh450 billion,” he said at the time.
The coronavirus pandemic spurred the faster adoption of digital payments around the world, with digital wallets, credit and debit cards and buy-now-pay-later solutions substituting physical money, according to the FIS Global Payments Report 2023.
Credit cards are the most popular way to pay for e-commerce transactions in the UAE, followed by digital wallets, which account for 24 per cent of transaction values, up from 23 per cent in 2021, the report said.
Meanwhile, global consumer spending through digital wallets will reach $10 trillion in 2025, up from $5.5 trillion in 2020, a report by UK-based Juniper Research said.
The partnership between Astra Tech and Ant Group will facilitate settlement processes and mobile-based transactions through Alipay in both physical stores and online platforms.
Physical store customers can scan a QR code at cashier desks when paying for items, then enter the amount for payment and confirm the transaction, Astra Tech said.
Retailers can also scan payment QR codes on a customer’s mobile phone. Both methods address challenges such as having to exchange currencies, withdraw cash and language barriers.
Alipay and PayBy plan to expand the service with the introduction of mini-programmes for merchants that could boost their engagement with customers visiting the UAE from Asia and Europe.
“Our alliance with Astra Tech not only opens doors to a seamless and integrated digital payment experience at physical stores in the Middle East, but also propels us towards a new era of strategic collaboration,” said Guoming Cheng, general manager of Ant Group in Europe and the Middle East.
“Furthermore, it extends an invitation to merchants to ride on the digitalisation wave, together transform the retail landscape and become part of this innovative ecosystem.”
Alibaba, which was co-founded by billionaire businessman Jack Ma, owns a third of Ant Group.
In March, Astra Tech, which raised $500 million in a funding round led by G42 in December, said it had obtained a MasterCard principal membership licence, which allows it to issue MasterCard-branded physical and digital cards through its PayBy and Botim platforms.
Astra Tech acquired PayBy last August and VoIP platform Botim in December.