Decoded: The Truth About Alipay

James Love

Alipay, China's Ecconomy, Social Commerce

April 5, 2019

What Is Alipay?

Just like its’ rival- WeChat, Alipay is a third-party mobile and online payment platform. This innovative platform was founded back in 2004 in Hangzhou, China by Chinese tech giant Alibaba Group. It was also the brainchild of Alibaba Group founder and former CEO Jack Ma. Back in 2015 Alipay moved its headquarters away from its parent company Ant Financial in Hangzhou and moved to Pudong, Shanghai.

Though many of Alibaba’ apps currently hold a large share of the market in their respective markets, Alipay has consistently remained right behind WeChat and right ahead of QQ Wallet. Alipay s currently has the second largest market share of third-party mobile payments, with over 900 million active users. In addition, Alipay offers all the traditional third-party payment services Chinese users have grown accustomed to such as money transfers, bill payments, e-commerce payments and more.

Why Choose Alipay

It is no secret that, its’ rival is WeChat Pay is extremely similar and has more active users than Alipay. So, why would one want to use Alipay? The answer is very simple, Chinese consumers in China use both apps interchangeably. Alipay also provides more discounts for its’ users purchases. This is especially true during Chinese New Year’s, which typically falls in February. Where all stores display their QR Codes for their famous “red packages”.  Which contain money, which a traditional gift for this holiday virtual.

Alipay’s competitive advances over WeChat and numerous other digital third-party payment services is that it is fully integrated with Taobao and Tmall. Two of the most prominent Chinese e-commerce platforms, in China. As both e-commerce pioneers are owned by Alibaba Group. Alipay has users’ base spreads over 110 countries and regions around the world including but not limited to the United States, India, Brazil, Russia and more.

Alibaba’s new philosophy of “new retail”, a  term coined by former CEO Jack Ma. This ‘new’ retail model simply focuses on bringing an e-commerce first strategy to brick and mortar stores, with an increased focus on the individual customer’s needs. Following the ideology, Alipay opens its first unmanned shop in Hong Kong in September. The only payment method accepted in the shop was Alipay and was equipped with RFID. These Radio Frequency Identification tags not only identify each item, but they also help track sales.

How Does Alipay Work?

By industry standards, Alipay is simply a digital payment platformed that allows users a safe way to make payments in-store and online. However, Alipay continues to go over and beyond the traditional service’s digital payment provider. Offering strict consumers privacy and working more than 65 financial institutions. All in efforts to make it easier for users with credits to simply download the app and begin using. Although, some of the features only work if you use a Chinese credit or debit card.

Once you have completed the download process of the app, open the app and begin the registration process. This will include entering your mobile phone number, make sure you enter a working number as you’ll receive a message with a numeric code in order to finish the registration.

Once the registration is completed, the Alipay home page will pop up. This is your opportunity for you to add your credit card by clicking on “Me” and then clicking on “Bank Cards”. Once you finished filling out the requested information, Alipay will ask you to enter a password for your transitions. This will serve as a second layer of security for your protection.

How To Pay And/Or Receive Money.

The “scan” feature of the app is used for scanning QR Codes, while out at stores and/or restaurants. By simply, entering the amount you want to pay and confirm the payment. While the “pay” section prompts an individualized bar code that will pop up on your smartphone that you can use to pay at a store that’s are equipped with the for Alipay payment.

This process is like the traditional checkout process at western retailers. However, instead of scanning a barcode to get the price, Alipay allows you to get the price and check out, all in the same portal. The money will be instantly transferred from your account by the credit card on file, creating a convenient alternative to the traditional check out process.

Another very important aspect of the app is the “collection” feature. This feature allows you to collect money from friends and family. Once you press the “collect” button a new QR will open, that you can show to people who owe you money. However, before you swipe, you should specify the amount that is owed. You can do so by simply clicking “Specify an Amount” and the payee can also do so by entering the amount owed.

Alipay’s Innovative Features

Just like the popular messaging app- WeChat, Alipay allows its’ users to chat with friends. To chat with your friends, click on the “friends” tab, a new page will open with all your friends that are on Alipay. Adding friends is just like WeChat, simply scan the QR code of the desired person you’re looking to add to your page.

With the Alipay app you can also open a chat with friends: clicking on “Friends” will open up a page with your friends on Alipay, to add new friends it works similar to “WeChat”, just scan the QR code of the person you want to add to your page. Though, this chat system is typically used to transfer money by utilizing the “transfer” button within inside the chat feature.

Aside from customizing your profile, you can also view all your transactions on Alipay and check your balance. To view your transaction history on Alipay go into your profile by clicking the “me” button and then clicking “transactions”, where a list of all transactions. To check the balance on your Alipay account Click the “balance” button, which will indicate how much is on your Alipay Account. However, this does not reflect the amount of money on the credit card associated with the account.

You can easily transfer money from your Alipay account to your credit card. By clicking on “balance” tab, followed by the “withdraw” tab and finally the by clicking on the “top up” tab where you can transfer money from your card to Alipay. This smart feature allows you to have better control over your expenses through the app.

How Alipay Improved Everyday Life.

Just like its’ competirors,  Alipay is integrated with Didi Taxi, a popular ridesharing service in China. Through the app, you can call a taxi and pay for the ride automatically through Alipay. Simply enter your destination the map and the app will contact the nearest taxi.

From the comfort of your own home, you can buy everything from take-out to buying airline tickets, or even a movie theater ticket. By simply opening the take-out category on Alipay you can choose from tons of restaurants or taverns near you. Their offerings range from everything from sushi to China’s latest beverage craze, bubble tea. All through the Alipay app, you can submit payment, and have it delivered to your house. And all you must do is confirm your phone and insert your address.

For lucky residents living in Hangzhou, China, also the same city where Alibaba Group headquarters are located. You can now pay for their ride on the Hangzhou Metro System through Alipay. Ditching the long lines and worn-out plastic cards for a new modern system. In fact, since late December there have QR scanners in over 70 metro stations through Hangzhou and both the entrance and exits. This new technology serves as a virtual metro card right on your phone.

The Differences Of WeChat Pay and Alipay

One of the most noticeable differences between both Alipay and WeChat pay is the aesthetics of each app. For comparison, WeChat pay has a more modern approach to its design. Although, WeChat Pay app is extremely user-friendly, the app doesn’t feature as many promotions at Alipay and doesn’t allow for many notifications to be sent out.

While, Alipay has the traditional Chinese design aesthetics. Utilizing nearly the entire app as promotional opportunities for of Alibaba’s products and services. Though, Alipay has significantly more promotional offerings for its’ users, it is also categorized by the various cities, for an easier user experience. In comparison to WeChat Pay, Alipay promotions are also more centralized and easier to find. To find promotions for WeChat Pay, you’ll need to click into every promotional account to find out what kind of deals merchant is offering.

Unlike WeChat, Alipay focuses more on providing financial products and services to its users. In fact, Yu’e Bao is one of Alibaba’s essential financial services. That has revolutionized how everyday people in China invest their money, especially in money market funds.Traditionally, market funds were sold by had banks and asset managers. However, since the creation of this new system, it has significantly decreased the investment threshold to only one yuan. By the end of 2018, Yu’e Bao was named the world’s largest money market fund, with almost two trillion RMB in assets and over 400 million users.

WeChat vs Alipay, Which One?

These two companies have drastically shaped the technology preferences of Chinese consumers. It is no secret that both Alipay and WeChat Pay are strict competitors, as they are both similar digital payment platforms that target similar demographics. They both even offer the same features such as, online payments, money transfer, ride-sharing, and hotel bookings.

However, throughout mainland China, both Alipay and WeChat Pay are both extremely popular as electronic payment methods. Rather if you’re a merchant trying to decide which payment method to start accepting or a tourist trying to figure which platform to download, you should use both! Nearly everyone from local merchants selling fruit to luxury retailers uses and accept Alipay and/or WeChat Pay.

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