Tencent-Backed Meituan Dianping Is Dropping Alipay As Its Payments Provider

July 30, 2020 5:43 am

Beijing (PingWest)—Meituan Dianping, the Chinese local services giant, has abandoned Alipay as one of its payments providers for the on-demand delivery business, further cutting its connection with Alibaba.

Alipay is owned by Ant Financial, the fintech affiliate of Alibaba.

When placing an order at Meituan, the Alipay payment option no longer exists. Instead, Meituan's credit payment service and bank card payment are placed first, followed by WeChat Pay and Apple Pay.

This means that the confrontation between Meituan Dianping and Alibaba has once again escalated. The local service giant has been deploying in the digital payment field and fully opened up the credit payment services at the beginning of this year. 

Meanwhile, Ant Financial started in March allowing third-party vendors to offer services such as food delivery and hotel bookings on its Alipay mobile payment platform to compete with Meituan Dianping.

Alibaba Group used to be an important investor of Meituan Dianping. The company led the $50 million Series B financing of Meituan in 2011 and participated in the Series C round in 2014.

However, due to the merger of Meituan and Dianping brought in its rival Tencent as a shareholder, Alibaba sold most of its shares in the startup and focused on building its own on-demand delivery platform, while Tencent took the chance to increase its investment in the unicorn.

In oder to counteract Tencent-backed Meituan, which has the largest share of the food delivery sector, Alibaba merged its food delivery platform and food and lifestyle services firm Koubei in 2018.

To date, Meituan, which went public in September 2018, has become China's third-largest Internet company after Tencent and Alibaba, with more than $100 billion market capitalization. At present, Alibaba still holds 1.48% of its shares.