American Express Co. (AXP), the biggest credit-card issuer by purchases, will offer an online payment service with Tencent Holdings Ltd. (700) in its first collaboration with an electronic payment partner in China.
The agreement will allow users of Tencent’s Tenpay online payment service to make purchases outside China, American Express and Tencent said in a joint statement today. Financial details were not disclosed.
Tencent, China’s biggest Internet company by revenue, faces competition from Alibaba Group Holding Ltd.’s Alipay and Baidu Inc.’s Baifubao in processing online payments for consumers in China, the world’s fastest-growing major economy. American Express said this month it is seeking to expand in emerging markets through acquisitions.
Shares of Tencent rose 3.4 percent, the most in five weeks, to close at HK$165.40 in Hong Kong trading. The benchmark Hang Seng Index fell 0.7 percent.
The partnership with Tencent will provide a “strong” boost to American Express’s operations in China, Dave Keung, vice president of the New York-based company’s global network division, said in the statement.
Tenpay accounted for 21.2 percent of China’s third-party payment market in the second quarter, ranking the service behind only Alipay, which had a 45.5 percent market share, according to research company Analysys International.
American Express is considering large international acquisitions that will help the company benefit from demand for mobile payments and online commerce in developing markets such as China, Executive Vice President David Messenger said this month.