Tencent Holdings Ltd, China's biggest Internet company in terms of sales, has teamed up with US credit card issuer American Express Co to allow its online payment service users to shop on overseas websites.

The move comes as Tencent tries to fend off competition from rivals such as Alibaba Group Holding Ltd, which is in head-to-head competition with Tencent in e-commerce, online payment and other areas.

Chinese users will be able to buy products from about 100 US websites that accept American Express credit cards, once they apply for a virtual account with Tenpay, Tencent's online payment arm.

Jim Lai, Tenpay's general manger, said overseas expansion will be a major strategy in years to come.

Until now Tenpay, which ranks second in the online payment market after Alibaba's Alipay, has mainly provided a payment service for Chinese users who want to shop on Chinese e-commerce websites.

Tenpay and American Express generate revenues by charging US vendors commission fees, said Lai, but he did not elaborate on the rates of commissions.

Sales of overseas shopping in China last year reached 26.5 billion yuan ($4.25 billion), and are expected to rise to 48 billion yuan this year and 74.4 billion yuan in 2013, according to market research company China e-Business Research Center.

Alipay also provides a payment service that has enabled users to shop on more than 600 overseas websites since 2007, the company said.