Alipay and Tencent Holdings Ltd's WeChat Pay dominate the mobile-payments market in China with a combined 90 per cent share.
Along with rival WeChat, Alipay dominates the Chinese mobile payments market, and both firms are looking to increase their presence overseas.
The move is aimed mostly at Chinese customers visiting the United States who will no longer need to exchange cash for local currency or pay credit card fees for using it internationally.
The deal with First Data will put the China-based Alipay into the same league as far as acceptance as Apple Pay.
The Aliplay mobile payment system will become more available in the USA, following trials at certain retail locations in California and NY.
First Data is a company that operates payment systems in the U.S., like the Clover, and this partnership will allow AliPay to work at four million merchants in the US.
"This will open up Alipay to where it's truly ubiquitous across the United States and hopefully more countries later", said Souheil Badran, president of Alipay's North America operations. It is owned by Jack Ma's Ant Financial, and represents Alibaba's digital payments arm.
Initially, this will be primarily of use to Chinese tourists in America. In addition to online shopping payments, money transfer, and utility bill payments, Alipay is expanding to offline payments. It said the First Data relationship will provide more North American merchants and retailers the ability to accept payments from millions of overseas customers who already know and trust the platform. The company was valued at US$75 billion by brokerage firm CLSA in September, following its US$4.5 billion fundraising round in April previous year.
First Data, which became public in 2015, operates a network for debit cards, processes card transactions and gives merchants data analytics and fraud detection services.