British mobile payment firm Powa has entered a strategic alliance with China’s UnionPay Network Payment, a a wholly owned subsidiary of China UnionPay (opens in new tab).
Powa enables shoppers to pay for goods in stores and online using their smartphones, while China UnionPay has about 4.5 billion credit card and debit card users worldwide, making this a big deal for Powa.
"This is undoubtedly a huge deal for Powa," electronic payments expert Dave Birch of Hyperion Consulting told the BBC (opens in new tab).
Powa’s chairman Dan Wagner said the deal could bring $5bn (£3.3bn) in revenues over three years.
The joint venture is called PowaTag UnionPay, and will first be launched in the Guangdong Province. There, it aims at 400,000 retailers. Once that milestone is achieved, it will move forward to a million before 2016 ends.
"We have a target to reach at least 50 million consumers regularly using the platform within one year from launch," said PowaTag UnionPay's chairman, Mr Hu Jinxiong.
In order to take part and use the services of the joint venture, China’s merchants will have to pay 13p per transaction, the BBC adds.
China has seen a surge in the use of smartphones lately, with 68 per cent of the country now using one. The country has more than 1.3 billion people. "The Chinese market is going mobile very quickly," says Mr Birch. "And the integration of payment systems and messaging platforms such as WeChat is a very interesting development."
With the new deal between Powa and UnionPay Network Payment, Chinese shoppers will have another, mobile way, to pay for their goods.