Alipay

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Alipay
Native name
支付宝
Zhīfùbǎo
Industry Financial services
Payment processor
Founded February 2004; 14 years ago (2004-02) in Hangzhou, Zhejiang, China
Founder Jack Ma
Headquarters Pudong, Shanghai, China
Area served
Worldwide
Key people
Jack Ma
Products Electronic payment processing
Banking
Mobile payment
Parent Ant Financial
Website www.alipay.com
Alipay
Traditional Chinese 支付寶
Simplified Chinese 支付宝

Alipay (Chinese: 支付宝) is a third-party mobile and online payment platform, established in Hangzhou, China in February 2004 by Alibaba Group and its founder Jack Ma. In 2015, Alipay moved its headquarters to Pudong, Shanghai, although its parent company Ant Financial remains Hangzhou-based.[1]

Alipay overtook PayPal as the world's largest mobile payment platform in 2013.[2] In the fourth quarter of 2016, Alipay had a 54% share of China's US$5.5 trillion mobile payment market, by far the largest in the world, although its share fell from 71% in 2015 as its rival Tencent's WeChat Pay was rapidly catching up.[3]

History[edit]

In 2003, Taobao launched the first Alipay service.[4] The PBOC, China's central bank, issued licensing regulations in June 2010 for third-party payment providers. It also issued separate guidelines for foreign-funded payment institutions.[citation needed] Because of this, Alipay, which accounts for half of China's non-bank online payment market, was restructured as a domestic company controlled by Alibaba CEO Jack Ma in order to facilitate the regulatory approval for the license.[5] The 2010 transfer of Alipay's ownership was controversial, with media reports in 2011 that Yahoo! and Softbank (Alibaba Group's controlling shareholders) were not informed of the sale for nominal value. Chinese business publications Century Weekly criticised Ma, who stated that Alibaba Group's board of directors was aware of the transaction.[6] The incident was criticised in foreign and Chinese media as harming foreign trust in making Chinese investments.[7] The ownership dispute was resolved by Alibaba Group, Yahoo!, and Softbank in July 2011.[8]

In 2013 Alipay launched a financial product platform called Yu'ebao (余额宝).[9] As of June 2013 the company still had what it called "a minor paperwork problem" with the China Securities Regulatory Commission, but the company said that they planned to expand the product while these are sorted out.[10]

In 2015, Alipay's parent company was re-branded as Ant Financial Services Group.[11]

In 2017, Alipay unveiled their facial recognition payment service.[12]

Services[edit]

Food ordering with Alipay in Mainland China

Alipay claims it operates with more than 65 financial institutions including Visa and MasterCard[13] to provide payment services for Taobao and Tmall as well as more than 460,000 online and local Chinese businesses.

Alipay is used in smartphones with their Alipay Wallet app. QR code payment codes are used for local in-store payments.[14] The Alipay app also provides features such as credit card bills payment, bank account managements, P2P transfer, prepay mobile phone top-up, bus and train ticket purchase, food order, ride hailing, insurance selection, digital identification document storage.[15] Alipay also allows online check-out on most Chinese-based websites such as Taobao and Tmall.[16]

The Alipay app allows users to add their own services provided from different companies to create a more personalised experience.

Since late-2008, Alipay has promoted public service payment services and has covered more than 300 cities nationwide, supporting more than 1,200 partner organizations.[17] In addition to utility bills such as water and electricity, Alipay also extends their services to areas such as paying transportation fines, property fees, and cable television fees.[18] Common online payment services also include hydropower coal payment, tuition payment and traffic fine.

On 15 January 2009, Alipay launched a credit card repayment service, supporting 39 domestic bank-issued credit cards.[19] It is currently the most popular third-party repayment platform. The main advantages are free credit card bills checking, repayments with no administrative fee, as well as automatic repayment, repayment reminders and other value-added services.[20] In the first quarter of 2014, 76% of credit cards were also paid by Alipay Wallet.

From December 2013, several chain convenience store companies, including Meiyijia, Hongqi Chain, and Qishiduo C-STORE and 7-Eleven, have successively supported Alipay payment; in December, Beijing taxi drivers began to accept Alipay to pay the fare. Subsequently, Wanda Cinema, Joy City, Wangfujing and other large-scale retail companies as well as movie theaters, KTV, and catering companies have access to Alipay.

International expansion[edit]

Internationally, more than 300 worldwide merchants use Alipay to sell directly to consumers in China.[citation needed] It currently supports transactions in 18 major foreign currencies.

Since the launch of Alipay in the Mainland China, Ant Financial introduced a series of expansion of the services to other countries.[21][22][23][24]

Asia[edit]

Hong Kong SAR[edit]

In 2017, Ant Financial introduced their expansion of service to Hong Kong. They launched the "AlipayHK" brand as a joint venture with CK Hutchison.[25] They launched a standalone app providing features such as mobile payment and P2P transfer. All transactions are settled and paid with Hong Kong dollar instead of Renminbi.[26] The service is now available in major chain stores such as McDonald's, 7-Eleven and Circle K.[27] Wet markets and other merchants are also further supported.[28]

Singapore[edit]

In 2017, Ant Financial partnered with CC Financial, a start-up company in Singapore. Alipay plans to expand its 20,000 acceptance points in Singapore, and open up their platform to Singapore banking users.[29][30]

Japan[edit]

Alipay entered Japan in 2015, with network up to 38,000. Ant Financial hopes that their network in Japan could help Chinese tourists that are heading to Japan.[31]

Bangladesh[edit]

In 2018, Alipay bought 20% shares in Bangladeshi of the mobile financial service provider bKash Limited.[32]

North America[edit]

United States[edit]

Ant Financial has partnered with First Data in 2017.[33] It allows Alipay service to be used at point-of-sale with more than four million retail partners in United States.[34]

Canada[edit]

In 2017, Alipay partnered with SnapPay to allow Canadian retailers to accept Chinese currency from Chinese shoppers. There are currently 700 merchants in Canada that supports Alipay.[35][36]

Security[edit]

Alipay provides multiple security mechanisms to make sure that user accounts are safe. An Alipay account requires the user to set up their own login password and separate payment password, which need to be different. The user can enter the login password up to five times and the payment password up to three times before the user is locked out of his or her account. To regain access to the account, the user must contact Alipay.[37] They also install a digital certificate, which can encrypt information sent over a network, preventing hackers from stealing passwords, thereby enhancing the security of online transactions.[38]

References[edit]

  1. ^ "支付宝总部迁址上海陆家嘴". Netease. 23 April 2015. 
  2. ^ John Heggestuen (11 February 2014). "Alipay Overtakes PayPal As The Largest Mobile Payments Platform In The World". Business Insider. 
  3. ^ "Race for China's $5.5tn mobile payment market hots up". Financial Times. 1 May 2017. 
  4. ^ "Subscribe to read". Financial Times. Retrieved 2018-03-11. 
  5. ^ Wang, Shanshan (27 May 2011). "Alipay Awarded Third-Party Payment License". Caixin Online. 
  6. ^ "How Jack Ma's Mistake Damaged China's Market". Caixin Online. 14 June 2011. 
  7. ^ "Jack Ma Talks To China Entrepreneur Magazine About The Alipay Case (UPDATED)". DigiCha. 6 July 2011. Retrieved 10 October 2013. 
  8. ^ Rusli, Evelyn M. (29 July 2011). "Yahoo and Alibaba Resolve Dispute Over Alipay". DealBook. 
  9. ^ Chohan, Usman W. "Financial Innovation in China: Alibaba's Leftover Treasure - 余额宝". McGill University. Retrieved 14 May 2014. 
  10. ^ Hsu, Alex (27 June 2013). "Alipay's Issue with CSRC Only a Paperwork Problem; Alipay Will Continue to Expand Yu E Bao". BrightWire News. 
  11. ^ Shih, Gerry (2014-10-16). "Alibaba affiliate Alipay rebranded Ant in new financial services push". Reuters. Retrieved 2015-12-22. 
  12. ^ Russell, Jon. "Alibaba debuts 'smile to pay' facial recognition payments at KFC in China | TechCrunch". 
  13. ^ "About Alipay". Alipay. Retrieved 10 October 2013. 
  14. ^ Cheng, Evelyn (2017-10-08). "Cash is already pretty much dead in China as the country lives the future with mobile pay". CNBC. Retrieved 2018-01-21. 
  15. ^ "Alipay adds digital storage feature for identification documents". South China Morning Post. Retrieved 2018-02-12. 
  16. ^ "Online payment services in China: How does Alipay differ from PayPal?". Nanjing Marketing Group. 2013-12-19. Retrieved 2018-02-12. 
  17. ^ 戴甜. "'Credit cities' taking shape in China". Chinadaily. Retrieved 2018-03-11. 
  18. ^ Liu, Charlie (2017-03-01). "Everything You Need to Know about Alipay and WeChat Pay". Medium. Retrieved 2018-03-11. 
  19. ^ Hsu, Sara. "This Chinese Credit Card Company Plans On Outsmarting Tencent And Alipay With A More Secure Product". Forbes. Retrieved 2018-03-11. 
  20. ^ "Yes, Foreigners Can Use AliPay -- This Is How". Retrieved 2018-03-11. 
  21. ^ "China's Alipay Is Moving Aggressively Into Foreign Markets - eMarketer". www.emarketer.com. Retrieved 2018-02-12. 
  22. ^ "Alipay Continues Its Global Expansion Efforts | PYMNTS.com". www.pymnts.com. Retrieved 2018-02-12. 
  23. ^ "Alipay takes on Apple and PayPal with US expansion". The Verge. Retrieved 2018-02-12. 
  24. ^ Huang, Echo. "China's Alipay will soon be about as widely accepted as Apple Pay in the US". Quartz. Retrieved 2018-02-12. 
  25. ^ Editorial, Reuters. "China's Ant brings in CK Hutchison as Hong Kong payments partner". U.S. Retrieved 2018-04-01. 
  26. ^ "Ant Financial enters Hong Kong market with AlipayHK app". South China Morning Post. Retrieved 2017-12-27. 
  27. ^ "Hong Kong fishmongers poised to lead city's cashless revolution". South China Morning Post. Retrieved 2018-02-12. 
  28. ^ "Alipay turns gaze to wet markets in HK e-payments push". EJ Insight. 2017-10-24. Retrieved 2018-02-12. 
  29. ^ hermesauto (2017-08-22). "Alipay to expand cashless payments to Singapore banking users, inks deal to expand here". The Straits Times. Retrieved 2018-02-12. 
  30. ^ "AliPay to launch local wallet for Singapore". TODAYonline. Retrieved 2018-02-12. 
  31. ^ "Alipay Chases Chinese Tourists to Japan". Bloomberg.com. 2017-12-20. Retrieved 2018-02-12. 
  32. ^ Independent, The. "Alipay parent firm steps into Bangladesh". Alipay parent firm steps into Bangladesh | theindependentbd.com. Retrieved 2018-04-27. 
  33. ^ "First Data to Power Alipay in North America". First Data. Retrieved 2018-02-12. 
  34. ^ Russell, Jon. "Alipay, China's top mobile payment service, expands to the U.S." TechCrunch. Retrieved 2018-02-12. 
  35. ^ "Alipay partners with Canadian tech firm to expand presence in Canada". Retrieved 2018-02-12. 
  36. ^ "China's Alipay is becoming more widely available in Canada this week". MobileSyrup. 2017-09-25. Retrieved 2018-02-12. 
  37. ^ Sui, Xinyu (February 2013). "以支付宝为例研究第三方支付的问题及对策". 经济论丛. 28: 236. 
  38. ^ Feng, Junli; Fan, Yingguang (March 2009). "支付宝在电子商务中的应用". 电子商务. 07. 

External links[edit]