Hong Kong — China’s $5.5-trillion mobile payments sector — more than 50 times bigger than the US’s — is being shaken up by one-time underdog Tencent, which is snatching market share from rival Alibaba. Alipay, which Alibaba launched in 2004 as a PayPal-type service to facilitate payments on its Taobao e-commerce platform, has long dominated China’s mobile payments. But its share of the Chinese market fell to nearly half by the end of last year while Tencent’s rose to more than a third. Alibaba had 54% market share in the fourth quarter of 2016 compared with 71% in the third quarter of 2015, according to the latest data from consultancy Analysys. Tencent’s share rose to 37% against 16% in the comparable period. ApplePay, which launched in China early last year, did not feature in the top 10. China leads the world in mobile payments, buoyed by booming online shopping and the relative dearth of alternatives, such as credit cards. China’s mobile payments hit $5.5-trillion last year, acc...

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