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Alipay

Alipay
Traditional Chinese 支付寶
Simplified Chinese 支付宝

Alipay.com is a third-party online payment platform with no transaction fees.[1] It was launched in China in 2004 by Alibaba Group and its founder Jack Ma. According to analyst research report, Alipay has the biggest market share in China with 300 million users and control of just under half of China's online payment market in February 2014. According to Credit Suisse, the total value of online transactions in China grew from an insignificant size in 2008 to around RMB 4 trillion (US$660 billion) in 2012.[2]

Alipay provides an escrow service, in which consumers can verify whether they are happy with goods they have bought before releasing money to the seller. This service was offered for what the company says are China's weak consumer protection laws, which have reduced consumer confidence in C2C and even B2C quality control.

The company says Alipay operates with more than 65 financial institutions including Visa and Mastercard[3] to provide payment services for Taobao and Tmall as well as more than 460,000 Chinese businesses. Internationally, more than 300 worldwide merchants use Alipay to sell directly to consumers in China. It currently supports transactions in 12 foreign currencies.

The payment methods are MasterCard, Visa, Boleto Bancário, Transferência Bancária, Maestro, WebMoney, and QIWI Кошелек as of May 2014.[4]

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 accounts 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.[5] The 2010 transfer of Alipay's ownership was controversial, with media reports in 2011 that Yahoo! and Softbank (Alibaba Group's controlling shareholders) 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.[6] The incident was criticized in foreign and Chinese media as harming foreign trust in making Chinese investments.[7] The ownership dispute was resolved by Alibaba Group, Yahoo!, and Softbank in July 2011.[8]

In 2013 Alipay launched a financial product platform called Yu'ebao (余额宝).[9] 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.[10]

References

[11]

  1. ^ Zhe, Sun (Jan 2012). "From Stall to Mall". News China. 
  2. ^ John Watling (14 February 2014). "China’s Internet Giants Lead in Online Finance". The Financialist. Credit Suisse. Retrieved 15 February 2014. 
  3. ^ "About Alipay". Alipay. Retrieved 10 October 2013. 
  4. ^ https://alipay.alibaba.com/checkout.htm (free registration required)
  5. ^ Wang, Shanshan (27 May 2011). "Alipay Awarded Third-Party Payment License". Caixin Online. 
  6. ^ "How Jack Ma's Mistake Damaged China's Market". Caixin Online. 14 June 2011. 
  7. ^ "Jack Ma Talks To China Entrepreneur Magazine About The Alipay Case (UPDATED)". DigiCha. 6 July 2011. Retrieved 10 October 2013. 
  8. ^ Rusli, Evelyn M. (29 July 2011). "Yahoo and Alibaba Resolve Dispute Over Alipay".  
  9. ^ Chohan, Usman W. "Financial Innovation in China: Alibaba’s Leftover Treasure - 余额宝". McGill University. Retrieved 14 May 2014. 
  10. ^ Hsu, Alex (27 June 2013). "Alipay’s Issue with CSRC Only a Paperwork Problem; Alipay Will Continue to Expand Yu E Bao". BrightWire News. 
  11. ^ "Alipay: A replacement for physical bank". StockNewsDesk. Retrieved 15 October 2014. 
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