Alipay’s Global Expansion Gathers Steam

Late-mover advantage， or how innovative newcomers outperform pioneers， is what propelled Alipay toward the pinnacle of mobile payments and related digital services in China. Now， Alipay is expanding globally， an unfolding saga of success breeding more success.

At the turn of the 21st century， China had no entrenched credit card culture. Smaller online businesses with relatively low sales volume were unable or unwilling to accept credit card payments， due to high transaction fees. It was too costly to build their own fraudproof e-checkout systems. To address this dilemma， Alibaba， whose online marketplace Taobao was growing rapidly， launched Alipay in 2004. It designed Alipay to be like Paypal-like， an online payment tool and escrow provider. Today， people see it as the avantgarde in mobile payments. But Alipay has gone beyond online payments into uncharted e-waters. For 450 million users， the Alipay app is a gateway to a wide array of functions， from options to buy wealth management products to booking medical services.

More than a decade after its founding in 1999， Alibaba established a financial affiliate， Ant Financial， to consolidate all such e-services under one roof. Users can connect to YuEbao， the first internet-based money market fund， which helps them to earn higher yields on their idle cash. It is considered to be more convenient than banks. Alipay also evaluates customers shopping and spending habits to figure out their creditworthiness. Consumption patterns captured by Alipay translate into “Sesame Credit” scores， which offer certain benefits to consumers， like depositfree services on bike rentals or skipping long lines at the hospital. Alipay is now an internet-based finance major， a onestop portal for all types of payment solutions， says Ni Xingjun， vice-head of Alipay. “From scanning QR codes to accessing bank loans， we see ourselves in the drivers seat in payment and financial services.” The app is ranked as the top third-party payment provider， with about 55 percent of domestic market share， followed by WeChat Pays 37 percent， according to iResearch. Li Chao， a senior analyst at iResearch， says Alipay is a good choice to make big-ticket purchases and for asset management services.

One of Alipays latest endeavors is a pathway to its sister app Ant Fortune，on which third-party financial institutions can set up virtual shops and post content to draw customers. The pathway is another sign that Alipay is seeking supremacy in the burgeoning online finance sector. Civic services have also gone virtual， thanks to Alipay. For Chinese people， traffic fines， remote medical diagnoses， marriage pre-registrations， income tax filings， doctor appointments and utility bill payments now require no more than a tap or a code scan on Alipay.

Zhejiang， among the wealthiest provinces， is home to Alipay. It is keen to embrace digital channels so that customers do not have to run an errand“more than once”， says Chen Guangsheng， the provincial governments vicesecretary-general. Customers can access the platform via Alipay. Combining location-based services with the payment function， Alipay guides users through its“City Service”， which aggregates civic affairs， and redirects them to respective online pages to fill out information and make e-payments.

Alipay is rapidly expanding overseas as a growing number of shoppinghappy middle-class. Chinese travel abroad to snap up products from luxury bags to high-end watches. The payment tool is accepted at more than 120，000 merchants， including high-end stores such as Harrods and Printemps， both magnets for Chinese consumers. To serve wealthier Chinese buyers， Alipay introduced its payment services at 10 major international airports in Germany， Japan and New Zealand. Departure tax refunds processed by Alipay were also made available in 23 countries. Alipay also signed a deal in May with US payment processing firm First Data that will allow its service to be used at points-of-sale of more than 4 million retail partners in the United States. Also in May， Carnival Corps first and largest brand in China， Costa Cruises， said it will give passengers the option to use their Alipay accounts as a payment method for cabin folios. All onboard spending， including shopping， leisure activities， excursions， food and drinks， will be added to each guests cabin folio when the purchase is made， and then cleared on a nightly basis via their Alipay account. The company has a vision to serve 2 billion global customers in the next decade， with more than 60 percent of users from outside the Chinese mainland， according to Douglas Feagin， senior vice-president of Ant Financial.

Alipay promotes cashless payment across EU

Chinese tourists can pay via Alipay to retailers who have a partnership with Barclays in UK. Chinese expats， students and tourists are expected to spend more than 1 billion pounds at such retailers in UK this year， news website Banking Technology said citing Barclaycard. British shopping malls including Harrods and Selfridges already accept Alipay. Alipay is an online payment tool run by Alibabas financial arm Ant Financial. Last December， the financial arm signed partnership agreement with BNP Paribas， Barclays， UniCredit， and Six Payment Services， a major payment service company， to expand its online payment service in Europe.

Currently， Alipay can be used in Frances Printemps， Germanys Zwilling store chain， and stores in Munich Airport. Alipays main target is providing service to 520 million Alipay users who use mobile payment when they travel in EU， Liu Yu， head of Alipay in EU， said to Xinhua News Agency. According to Liu， Alipay also has signed MOU （memorandum of understanding） related to cashless payment with Monaco government in June.

Alipay helps German retailer attract more Chinese customers

Germanys second-largest drug store chain， has introduced Alipay， a ma- jor mobile payment platform in China， into its more than 2，000 retail outlets across Germany since its first adoption in May. Raoul Rossmann， managing director of ROSSMANN， told Xinhua News Agency that the company is trying to improve Chinese customersshopping experience through the using of Alipay. “We are continuously learning about our Chinese customers and their preferences，” said Rossmann， whos responsible for sales and marketing at ROSSMANN. The Chinese are well-regarded and increasingly important customers， said the drug store chain. The managing director said the adoption mainly targets the groups of Chinese tourists and Chinese customers who reside in Germany. The positive responses from the Chinese customers have shown the effects.

“It would be very convenient if there is cashless payment per smartphone like Alipay in Germany. The cooperation between ROSSMANN and Alipay makes it possible，” said Cheng Wei， who works in Germany. According to Cheng， he used to pay with his smartphone in China with no need to bring cash with himself. He totally welcomes to see that Alipay can be used in German stores. Another Chinese customer Qu Lijun， a student in Germany， recalled her embarrassed moment when she went shopping in a supermarket but forgot to carry her wallet. “At that moment， I only had my smartphone in my hand and really hoped that I could pay with it，” she said. For ROSSMANN， Alipay is not an improvement only for the Chinese customers， but also leverage to increase ROSSMANN brand awareness in China. “We are working on providing coupons and other discount opportunities in the Alipay App， which will allow users to directly see if there is a promotion ongoing at a ROSSMANN shop nearby，” said Rossmann.

Alipay partners with Han Feng to further expand financial service in US

Alipay， Chinas online and mobile payment platform giant operated by Ant Financial Services Group， announced that it has signed a Memorandum of Understanding （MoU） with Han Feng Inc， a leading food supplier for Chinese restaurants and supermarkets in the United States. The MoU will enable Han Fengs merchant partners to accept payment via Alipay， which currently has more than 520 million active users in China alone.

Through the partnership， Alipay will empower Han Fengs 14，000 merchants to better serve and connect with Chinese consumers in North America， starting with New York and North Carolina. Alipay will also enable users to find merchants nearby， receive coupons and make purchase decisions through the apps “Discover” function.“Chinese consumers leverage Alipay as a Lifestyle Enabler and our partnership with Han Feng provides an experience that combines discovery and payment，”said Souheil Badran， president of Alipay North America. “By pairing Han Fengs extensive reach within the Chinese consumer market with the familiarity of the Alipay platform， both Chinese consumers and the merchants that provide them with services will benefit from this part-nership，” Badran added. “We are thrilled to partner with Alipay as Han Fengs customer base offers a perfect initiating platform to promote Alipay services in the United States. By maximizing Alipays visibility to the US consumer， we are also bringing our merchant partners access to a new revenue stream，” said Jonathan Ni， CFO of Han Feng Inc.

Chinas Alipay enters Spain

Chinese tourists will be able to use Alipay mobile wallet in Spain thanks to an agreement signed between Spanish bank BBVA and Chinas Ant Financial Services Group， BBVA reported on Wednesday. Alipay is one of worlds largest online and mobile payment platforms operated by Ant Financial Ser- vices， an affiliate company of Alibaba. BBVA， Spains second-largest bank， is the first Spanish financial institution to cooperate with Alipay， integrating the system into the banks Smartpay service. The bank explained that Smartpay is already available for all stores and functions thanks to an app installed in the stores cell phone. The app should be updated in order to accept payments with Alipay.

The Spanish lender is also working with Spains large stores so that they can accept payments with Alipay as early as possible， and merchants interested in signing up for Smartpay can register at BBVA branches， the bank said. “This agreement is a great opportunity to service this growing market of visitors to Spain while allowing Spanish stores to promote sales and special offers directly to Chinese tourists，” said Jose Fernandez da Ponte， Head of Business Development and New Ventures at BBVA. Rita Liu， Head of Alipay EMEA（Europe， Middle East and Africa）， said“cooperating with BBVA not only al-lows us to make Chinese tourists shopping experience in Spain as simple as in China， but also makes it easier for Spanish merchants to do business with Chinese customers”.

Ant sets sights on mobile pay dirt in Malaysia

Ant Financial Services Group plans to roll out a mobile payment service in Malaysia based on Alipay as it bids to expand into the lucrative Southeast Asian market. The affiliate of Alibaba Group Holding Ltd has announced it will form a joint venture with Touchn Go Sdn Bhd， or TNG， which is part of Malaysian conglomerate CIMB Group Holdings Bhd. Funding will be used to create an online and offline payment provider， which will “deliver mobile wallet solutions”， and other related financial services， the companies said in a statement. But detailed financial figures related to the deal were not released.

“TNGs joint venture will definitely spur the growth of the mobile payments market in Malaysia，” said Quah Mei Lee， a digital transformation industry principal at consultancy Frost& Sullivan Asia Pacific. TNG runs a contactless card business of the same name in Malaysia， which is used by customers to pay for toll roads， public transport and parking.By adopting Alipay app technology， its 10 million active card clients will be able access more service on their mobiles such as e-commerce. “TNG is looking to expand its market through Alipay，”said Quah， who expects the $1 billion mobile payment services market in Malaysia to grow at a compound rate of 28.7 percent by 2021.

Ants move mirrors a series of other partnership deals forged with companies in India， Thailand and Indonesia， where similar digital payment services have been wheeled out. Paytm， in which Ant holds a minority stake， reported it had 220 million users in India by February. “We hope to launch a money-market fund and a credit-scoring system similar to the portfolio offered by Ant in China，” Vijay Shekhar， chief executive officer of Paytm in India， said in April. Beyond the domestic market， Chinas big two internet players， Tencent Holding Ltd and Alibaba， are extending their fight for online supremacy in digital payment services. Tencents WeChat， which has nearly one billion active users and is closing the market share gap with Alipay， has applied for a license in Malaysia. “This will allow us to offer lo- cal payment services via the app，” Grace Yin， director of WeChat Pays global operations， told a technology conference in Hong Kong earlier this month. Initially， this will tap into the growing market fueled by Chinese tourists in the region， Li Chao， a senior analyst at iResearch Consulting Group， confirmed.“But following in the footsteps of Chinese tourists is only the start for Alipay and WeChat，” Li said. “Tapping the local market will provide a more sustainable growth path.”