Alipay 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. Alipay overtook PayPal as the world's largest mobile payment platform in 2013. As of 31 March 2018, the number of Alipay users reached 870 million. It is the world's number one mobile payment service organization and the second largest payment service organization in the world. According to the statistics of the fourth quarter of 2018, Alipay has a 55.32% share of the third-party payment market in mainland China, and it continues to grow.
History
The service was first launched in 2003, by Taobao. 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. Because of this, Alipay, which accounted 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. The 2010 transfer of Alipay's ownership was controversial, with media reports in 2011 that Yahoo! and Softbank 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. The incident was criticised in foreign and Chinese media as harming foreign trust in making Chinese investments. The ownership dispute was resolved by Alibaba Group, Yahoo!, and Softbank in July 2011. In 2013 Alipay launched a financial product platform called Yu'ebao. 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. In 2015, Alipay's parent company was re-branded as Ant Financial Services Group. In 2017, Alipay unveiled their facial recognition payment service.
Services
Alipay claims it operates with more than 65 financial institutions including Visa and MasterCard 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. 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. Alipay also allows online check-out on most Chinese-based websites such as Taobao and Tmall. 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. 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. 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. 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. 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. From March 26, 2019, the service fee will be charged for the payment of credit card through Alipay. Customers only pay the portion of the payment that exceeds 2,000 yuan at 0.1%. In November 2019, Alipay introduced Tourpass, a service component that allows non-Chinese users to use its mobile payment feature by pre-loading Chinese Yuan equivalent foreign currency into the app. In 2020, Alipay used QR code system to help in containing COVID-19 outbreak. The health code system tags users one of three colors according to their location, basic health information and travel history.
International expansion
Internationally, more than 300 worldwide merchants use Alipay to sell directly to consumers in China. 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.
Asia
Bangladesh
In 2018, Alipay bought 20% shares in Bangladeshi mobile financial service provider bKash Limited.
In 2017, Ant Financial introduced their expansion of service to Hong Kong. They launched Alipay Payment Services Ltd. and the "AlipayHK" brand as a joint venture with CK Hutchison. 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. The service is now available in major chain stores such as McDonald's, 7-Eleven and Circle K. Wet markets and other merchants are also further supported.
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.
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.
South Korea
Alipay was introduced in South Korea in 2015, and is now available at various merchants around the country. Users can even receive an instant tax refund at four major airports in the country. In 2019, taxis in Seoul and Starbucks will accept Alipay via Kakaopay.
Oceania
Australia and New Zealand
In February 2019, Alipay and Tourism Australia announced a service to promote Australian destinations to Chinese tourists using the city of Sydney as a 12-month pilot project. The new Sydney City Card will introduce an interactive city map in the Alipay app to alert tourists to participating locations and retailers where Alipay payments are welcomed. A similar initiative will be trialed concurrently in Queenstown, New Zealand.
Ant Financial has partnered with First Data in 2017. It allows Alipay service to be used at point-of-sale with more than four million retail partners in United States.
In 2017, Alipay partnered with SnapPay to allow Canadian retailers to accept Chinese currency from Chinese shoppers. There are currently 800 merchants in Canada that supports Alipay, including most Cadillac Fairview mall locations in partnership with OTT Pay, such as the flagship Eaton Center of Toronto and CF Chinook Centre in Calgary. Air Canada began allowing transactions in Alipay to book flights from Canada and the United States beginning in August 2018, after initially rolling out the feature for booking of flights originating from China.
Europe
Iceland
Alipay has partnered with Splitti and ePassi in Iceland.
Alipay has started cooperating with Vipps in Norway. 30 shops in Bergen are ready to receive Alipay-customers, and in January 2019 some shops in Oslo will be ready.
United Kingdom
Alipay partnered with Barclaycard in United Kingdom, bringing Alipay to UK retailers.
Security
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. A user must 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.
Comparison with other payment systems
Alipay is conceptually similar to Apple Pay, WeChat Pay and PayPal because it overlays traditional card payment methods. Although users receive immediate notification of the transaction, the main difference among Alipay and an instant payment system, like Venmo or Zelle is that the funds transfer between counterparties is not immediate. The settlement time depends on the payment method chosen by the customer, while for instant payment systems, the funds are transferred within seconds or minutes.
Related events
A person named Alipay
Alipay has received attention for the same name as the Chinese payment platform "Alipay". In March 2016, Alipay said he hoped to see Ma Yun, Alipay responded that he could meet Ma Yun, but they have not met until now.
A person named Ali
is a Hong Kong actress and television presenter. She is later invited to be the brand ambassador in Hong Kong. Notification sound in AlipayHK are recorded by her as well.
