THE OTHER ALL-IN-ONE APP WeChat is no longer China’s only killer app; Ali­pay is go­ing global and com­pre­hen­sive

China Daily (Hong Kong) - - BUSINESS - By HE WEI in Shang­hai hewei@chi­

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, un­fold­ing a 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 vol­umes were un­able or un­will­ing to ac­cept credit card pay­ments due to high trans­ac­tion fees. It was too costly to build their own fraud-proof e-check­out sys­tems.

To ad­dress this dilemma, Alibaba, whose on­line mar­ket­place Taobao was grow­ing rapidly, launched Ali­pay in 2004. It de­signed Ali­pay to be Pay­pal­like, an on­line pay­ment tool and es­crow provider.

To­day, peo­ple see it as the avant-garde in mo­bile pay­ments. But Ali­pay has gone be­yond on­line pay­ments into un­char­tered 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 Yu’Ebao, the first in­ter­net-based money mar­ket fund, that helps them to earn higher yields on their idle cash. It is much 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 de­posit-free ser­vices on bike-ren­tals to skip­ping long lines at the hos­pi­tal.

Ali­pay is now an in­ter­net-based fi­nance ma­jor, a one-stop por­tal for all types of pay­ment so­lu­tions, said Ni Xingjun, vice-head of Ali­pay. “From scan­ning QR codes to ac­cess­ing bank loans, we see our­selves in the driver’s seat in pay­ment and fi­nan­cial ser­vices.”

The app is ranked as the top


third-party pay­ment provider with around 55 per­cent of do­mes­tic mar­ket share, fol­lowed by archri­val WeChat Pay’s 37 per­cent, ac­cord­ing to iRe­search.

Li Chao, a se­nior an­a­lyst at iRe­search, said Ali­pay is a good choice to make big-ticket pur­chases and for as­set man­age­ment ser­vices.

One of Ali­pay’s lat­est en­deav­ors is a path­way to its sis­ter app Ant For­tune, on which third­party fi­nan­cial in­sti­tu­tions can set up vir­tual shops and post con­tent to lure cus­tomers. The path­way is another sign that Ali­pay is seek­ing supremacy in the bur­geon­ing on­line fi­nance sec­tor.

Civic ser­vices have also gone vir­tual, thanks

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