Chinese technology company Tencent is pushing into the smart retail sector by buying a “substantial” stake in Australian payments firm Afterpay.

Tencent is a listed company on the Hong Kong Stock Exchange. The company provides internet value-added services, including digital entertainment, online advertising, and fintech and cloud services. Its communications platforms include Weixin, WeChat and QQ. Its Weixin Pay service is the leading mobile payments platform in China, facilitating an average of over a billion commercial transactions per day.

“We feel very privileged to welcome Tencent as a substantial shareholder in our business,” said Anthony Eisen and Nick Molnar, co-founders of Afterpay. “Being able to attract a strategic investor of this calibre is extremely rewarding and is a testament to our team and the strength of our differentiated business model.

“Tencent’s investment provides us with the opportunity to learn from one of the world’s most successful digital platform businesses. To be able to tap into Tencent’s vast experience and network is valuable, as is the potential to collaborate in areas such as technology, geographic expansion and future payment options on the Afterpay platform. We remain focused on delivering value for our new and existing shareholders over the long term.”

Afterpay is a technology-driven payments company that aims to drive retail innovation by allowing retailers to offer a “buy now, receive now, pay later” service that does not require end-customers to enter into a traditional loan or pay any upfront fees or interest to Afterpay. The company has around 4.3 million active users and approximately 30,600 active retail merchants on-boarded.

“We are pleased to become investors in Afterpay,” said James Mitchell, chief strategy officer of Tencent. “Inside China, we operate the leading digital payment service and a rapidly growing fintech platform, and outside China we have actively invested in pioneering fintech companies, providing us with unique insights into emerging fintech services. Afterpay’s approach stands out to us not just for its attractive business model characteristics, but also because its service aligns so well with consumer trends we see developing globally in terms of Afterpay’s customer centric, interest free approach as well as its integrated retail presence and ability to add significant value for its merchant base. We look forward to a deep and long-term business partnership between Tencent and Afterpay.”

Tencent confirmed its interest with the lodgement of a notice of initial substantial holder on the Australian Securities Exchange this month.