Alipay is China’s leading third-party payment solutions provider, an outstanding achievement considering the size of the market. While the Western world is concerned with players such as PayPal, this giant is slowly spreading its wings across the rest of the globe. Patrick Brusnahan looks into research on the firm
Alipay is a subsidiary of Ant Financial Services which is controlled by Alibaba Group Holding. The company’s services include online payments, mobile payments, cross border e-commerce payments, payment collections, payment transactions, auto debit services, recurring payments and secure payment services.
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According to research from Timetric, Alipay is the world’s largest digital and mobile wallet in terms of billing volume. As of December 2014, 42.3 billion transactions have gone through its system with around 10 million merchant accounts.
While operations are concentrated in China, it is available in 110 countries and Chinese Alipay users can make payments to merchants in 110 countries. Its net revenue for 2015 was CNY34.5bn ($5.3bn).
There are 400 million online and mobile users of Alipay in China, as well as one million offline users. In Southeast Asia and Australia, there are an added five million accounts.
It’s little wonder that companies are hesitant to enter the Chinese market with the Alipay behemoth present. Sebastian Siemiatkowski, CEO and co-founder of Klarna, at Money 20/20 Europe, said: "I would never go to China because Alipay is one of the most impressive companies I’ve ever met, they’re amazing, so impressive, so smart, so dedicated, and so hard-working, that there’s just nothing [for Klarna] to do in China."
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By GlobalDataGeographical presence
Alipay accounts for 69.7% of China’s total third-party online and mobile payment market. In 2015, Alipay extended its mobile wallet services to Europe, South Korea and Taiwan.
In 2014, Alipay started offering payment services to Chinese consumer-to-consumer (C2C) marketplace Taobao, enabling Chinese consumers to buy Australian agriculture products. In addition, Alipay provides online and mobile payment services to Chinese shopping sit Aliexpress to source products from Russian merchants.
So what does Alipay offer?
A variety of services is on offer for customers of Alipay. Cross-border payments are available for Chinese shoppers, as well as bill payments for electricity, water and cable utilities in China. A prepaid card recharge service is offered, as well as money transfer services to any bank account. Alipay’s mobile wallet also supports in-store payments by scanning barcodes or QR codes.
Chinese merchants can be provided micro-loans by Alipay, which also provides in-store payment services in China and some countries in Europe.
From 2015, Alipay provided a new ‘ePass’ service to offer quick payments and logistics services to international merchants. ePass facilitates product deliveries directly to Chinese buyers.
Alipay works like a digital wallet and can store customers’ details such as contact information, payment methods and relevant data. This wallet can be used for payments on Alibabe, Taobao and Tmall. Users can transfer money to Alipay accounts through personal Chinese bank accounts or bank cards. For bill payments, users scan the barcode on the bill instead of manually entering payment details
