8 Things You Didn’t Know About Chinese New Year
Just a few weeks ago, thousands of partygoers donned bright and tight outfits as they…
Alipay, China’s most dominant payment platform, is the reason cash has become virtually obsolete in China. The digital wallet was responsible for the massive wave of cashless payments that swept across China. As of last year, it handled more than half of China’s 15.5 trillion dollar payments market.
Established by Alibaba in 2004, when credit cards were rare and cash was the most trustworthy form of payment, Alipay was first created as a payment method on Taobao, China’s version of Amazon, which is owned by the Alibaba Group. In 2014, Alibaba moved Alipay under a new sister company, Ant Financial, currently valued at 150 billion US dollars making it bigger than Goldman Sachs and American Express. Alipay now has over 700 million annual active users with an increase of more than 200 million year on year.
China is light years ahead of the rest of the world when it comes to mobile payments. With its rapid adoption of online payment methods such as Alipay, they have leapfrogged the United States where Americans are still wedded to plastic cards, paper checks and cash. Whether it’s street vendors, corner stores, restaurants, high-end department stores, or even buskers, they’ll all be equipped to accept QR (quick response) payments, and they will all accept Alipay. In fact, research has indicated that 84 per cent of Chinese citizens were not concerned about leaving home without any cash or cards; a figure that most other countries could only dream of. While the rest of the world is still playing catch up, Alipay has been the driving force in catapulting China to take its current throne as a leader in the cashless revolution. In 2016, China’s mobile payment transactions hit 5.5 trillion US dollars, accounting for 74 per cent of all online payments and setting China apart in the world’s economy. The future of China’s mobile payment market is also quite optimistic with projections showing that the market transaction would reach 6.3 trillion US dollars in 2020.
There are three ways for shoppers to make payments via Alipay:
China’s online retail market is larger than the next 10 markets combined. Catering to the Chinese who are the most digitised shoppers in the world requires innovation and Alipay does just that. It rode the mobile commerce wave and became the dominant payment method until WeChat joined the fray and proved to be a formidable rival in no time. To benefit the shoppers and improve user retention Alipay also provides Yu’ebao service, a money market fund for shoppers’ deposits in their Alipay accounts. With interest rates higher than bank account deposit rates, more shoppers began using the Yu’ebao service as a virtual wallet which turned out to be a milestone for Alipay. It laid the foundation for the expansion beyond payment services to become a fully-fledged financial services company—Ant Financial. Now, Alipay has connections with a number of brands such as Airbnb, Uber and Didi Chuxing, which acquired Uber China last year. Thus, hotels, flights and trains can be booked in Alipay apps through their integrated partners.
With a series of partnerships and acquisitions, Alipay has its eye on Chinese tourists abroad. JGOO is an official UK partner of Alipay, allowing UK businesses to accept payments via Alipay.