China’s largest third-party payment services Alipay is now legal for use in Macau but casinos will not offer it, says a Union Gaming analyst.
Following the launch of its payment services in July, Alipay through the company’s collaboration with a locally authorized institution is now permitted to operate in the city, the Monetary Authority of Macau (AMCM) has confirmed on Friday.
“Their co-operation has been duly approved by [the] authority and doesn’t violate any regulations in Macau,” added AMCM
Alipay, operated by Alibaba Group Holding Ltd’s finance arm Ant Financial Services Group, is now available in 107 stores in Macau with more than 51 local brands introducing Alipay’s QR code payment service. Founded in 2004, the company has gained 550 million registered users and facilitates over 8.5 million online transactions daily exceeding 2 billion yuan, surpassing PayPal as the world’s largest third-party online payment solution.
Union Gaming analyst Grant Govertsen noted that pawn shops may not be offering Alipay yet but are expected to explore the option if further UnionPay restrictions are put in place, reported Barron’s Asia.
“As it relates to casino operators, we would not expect them to offer Alipay Wallet in-person payments on casino floors given how contentious that would be – not to mention potential legal ramifications,” added Govertsen.
The Macau government has limited overseas cash withdrawals from China’s Union Pay service to a total of 50,000 yuan ($10,800) for the period between October 1 and December 31 this year but, starting January 2016, there will be an annual limit of 100,000 yuan ($21,800), while Alipay Express can approve up to 5,000 yuan ($806) per transaction and a total of 50,000 yuan per month.
Standard & Poor’s published a new outlook for Macau’s gaming sector, saying a “meaningful rebound in gaming revenue” is “unlikely in 2016.” According to its projection, annual revenue could drop to a range of 30% to 35% from a previous expectation of a 25% to 35% decline.
“A newly introduced cap on overseas cash withdrawals through China UnionPay and potential tightening of regulations on junkets may further undermine demand in the Macau gaming industry, especially from high rollers. We view a decline of up to 10% as our downside scenario, if sluggish VIP patronage more than offsets the revenue from new gaming capacity and our assumption that mass market revenue will stabilize.”
