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April 24, 2009updated 04 Apr 2017 4:17pm

Alipay poised to overtake PayPal

Hard on PayPals heels is Chinas largest e-commerce company Alibaba Groups online payment service Alipay, which by the end of February 2009 had notched up its 150 millionth registered user

By EPI editorial

(FREE) PayPal will be hard pressed to retain its position as the world’s largest provider of online alternate payments for much longer, at least in terms of account holders.

Hard on PayPal’s heels is China’s largest e-commerce company Alibaba Group’s online payment service Alipay, which by the end of February 2009 had notched up its 150 millionth registered user.

The vast majority of Alipay’s registered users are individuals, while around 460,000 are businesses or online merchants.

Though still trailing the 175 million registered users reported by PayPal at the end of 2008, Alipay is gaining ground fast – having between August 2008 and February 2009 gained a staggering 50 million new users, 20 million of these being added in the first two months of 2009.

During 2008 PayPal added 34 million new account holders though, notably, the number of active account holders fell from 83.2 million in 2007 to 70.4 million in 2008.

Active account holders in 2008 included those of Bill Me Later (BML), acquired by PayPal’s parent company eBay in the fourth quarter of the year.

In terms of the value of payments, however, PayPal appears at least for now to be in no danger of loosing its current position as the world’s leading online payments service.

eBay reported that in 2008 its payments operations had handled transactions valued at $60.1 billion, up 26.6 percent compared with 2007. MBL accounted for about $160 million of the 2008 total.

Alibaba has not provided annual data for payment values. However, it has revealed that Alipay’s total daily transaction value has increased from CNY450 million ($66 million) at the end of August 2008 to up to CNY700 million in February 2009.

On an annualised basis this indicates a total transaction value of some $37 billion, almost two-thirds of the total achieved by PayPal in 2008.

The number of Alipay transactions has also soared, increasing from 2 million per day in August 2008 to 4 million per day in February 2009.

On an annualised basis the latter figure equals almost 1.5 billion transactions, significantly more than the 889 million successfully completed transactions recorded by PayPal in 2008.

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