China's leading online payment system Alipay announced a partnership Tuesday with airlines and travel agencies that will allow more Chinese travelers to buy plane tickets online without a credit or debit card, potentially setting up the Bay Area for an influx of visitors.

Alipay is the online payment affiliate of China's colossus e-commerce company Alibaba Group, which has offices in Santa Clara. It has joined with UATP, the payments system used by almost every major airline in the world, as well as tens of thousands of hotels, travel agencies and rail systems. The new partnership will allow China's 800 million Alipay account holders to book tickets from airlines such as American Airlines and United Airlines using their Alipay accounts.

The deal removes roadblocks for many Chinese, particularly middle-class and young citizens, trying to fly internationally, and could be a boon for the U.S. tourism industry and the Bay Area, a top destination for Chinese business leaders and entrepreneurs.

China is second only to Japan in the number of trans-Pacific travelers to the U.S. By 2017, China and the U.S. will exchange 5.2 million passengers annually, which represents 6.7 percent year-over-year growth, according to the International Air Transport Association.

San Francisco International Airport receives 73 flights each week from China. That number will jump in June when United begins adding nonstop flights between Chengdu, China's fourth-largest city, and SFO. With the Alipay option, industry experts expect demand for flights to the Bay Area will accelerate.


Advertisement

"The Bay Area is one of the biggest destinations for the Chinese traveler," said Jingming Li, who heads Alipay's international operations from the Santa Clara office.

Until the partnership with UATP, Chinese consumers could not buy directly from a U.S. airline with Alipay. But in China, many consumers can only make online purchases with Alipay -- out of a population of 1.4 billion, there are about 318 million credit cards in the country, according to research from Hudson Crossing. The U.S. has about four times that much plastic.

"It's a heavily walled garden when it comes to credit cards," said Henry Harteveldt, travel industry analyst with Hudson Crossing.

PayPal, its U.S. equivalent, is slightly more than one-sixth the size, with about 137 million account holders.

UATP serves about 250 airlines, and each airline will decide whether they want to add Alipay to its website, said spokeswoman Wendy Ward. Li said Alipay could "be up and running" on airline websites in a few months.

China spends more money on tourism abroad than any other country -- $102 billion in 2012 -- and Chinese travelers account for nearly one out of four new passengers expected to join the growing international travel market by 2016, according to the World Tourism Market and the International Air Transport Association.

The Bay Area has benefitted from much of that travel money. Chinese investors have invested in startups and tech companies, and backed infrastructure such as Hanhai Z-Park in San Jose and a $1.5 billion development near Oakland's Jack London Square.

Contact Heather Somerville at 510-208-6413. Follow her at Twitter.com/heathersomervil.