Reports in German media are claiming that German banking software company Wirecard AG is in talks with top representatives of China's financial services company Alipay - a unit of e-commerce giant Alibaba - to sell its 25 percent stake to the Chinese company.

Reports claim that both parties are showing keen interest, as both sides are hopeful of benefitting from the deal. Alipay wants to tap into German expertise in financial services, while Wirecard will get a large shareholder base following a huge drop in its share prices over the recent months.

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A spokeswoman from Wirecard refused to comment on media reports, but confirmed that company representatives are in touch with Alipay officials over strategic partnership. However, sources from Alipay have refused to issue any confirmation about the negotiation.

This is the second time in recent months that a Chinese company is showing interest in a German company. Last month reports emerged that Chinese consumer electronics company Midea Group was interested in acquiring German robotic company Kuka. The reports were later confirmed by both companies.

Alipay is the market leader in China's online payment market, boasting about 400 million active users in world's second largest economy. The company claims that it enjoys a whopping 80 percent market share in China's mobile payment market.

Alipay's ruthless domination has meant that American-based online payment giant Paypal is struggling to cement its position in the lucrative Chinese market. However, over the months Alipay has been in the news regarding overseas acquisition, as the company is seriously looking for growth opportunities beyond the Chinese market.

TagsAlipay, Alibaba, china, Jack Ma, Wirecard AG