Alipay

In 2003, Taobao launched the first Alipay service.[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.[citation needed] 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 criticised 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] In 2015, Alipay's parent company was re-branded as Ant Financial Services Group.[11] In 2017, Alipay unveiled their facial recognition payment service.[12] Services[edit] Food ordering with Alipay in Mainland China Alipay claims it operates with more than 65 financial institutions including Visa and MasterCard[13] to provide payment services for Taobao and Tmall as well as more than 460,000 online and local Chinese businesses. Alipay is used in smartphones with their Alipay Wallet app. QR code payment codes are used for local in-store payments.[14] The Alipay app also provides features such as credit card bills payment, bank account managements, P2P transfer, prepay mobile phone top-up, bus and train ticket purchase, food order, ride hailing, insurance selection, digital identification document storage.[15] Alipay also allows online check-out on most Chinese-based websites such as Taobao and Tmall.[16] The Alipay app allows users to add their own services provided from different companies to create a more personalised experience. Since late-2008, Alipay has promoted public service payment services and has covered more than 300 cities nationwide, supporting more than 1,200 partner organizations.[17] In addition to utility bills such as water and electricity, Alipay also extends their services to areas such as paying transportation fines, property fees, and cable television fees.[18] Common online payment services also include hydropower coal payment, tuition payment and traffic fine. On 15 January 2009, Alipay launched a credit card repayment service, supporting 39 domestic bank-issued credit cards.[19] It is currently the most popular third-party repayment platform. The main advantages are free credit card bills checking, repayments with no administrative fee, as well as automatic repayment, repayment reminders and other value-added services.[20] In the first quarter of 2014, 76% of credit cards were also paid by Alipay Wallet. From December 2013, several chain convenience store companies, including Meiyijia, Hongqi Chain, and Qishiduo C-STORE and 7-Eleven, have successively supported Alipay payment; in December, Beijing taxi drivers began to accept Alipay to pay the fare. Subsequently, Wanda Cinema, Joy City, Wangfujing and other large-scale retail companies as well as movie theaters, KTV, and catering companies have access to Alipay. International expansion[edit] Internationally, more than 300 worldwide merchants use Alipay to sell directly to consumers in China.[citation needed] It currently supports transactions in 18 major foreign currencies. Since the launch of Alipay in the Mainland China, Ant Financial introduced a series of expansion of the services to other countries.[21][22][23][24] Asia[edit] Hong Kong[edit] Signage shown in Hong Kong, welcoming both Mainland China version of Alipay and AlipayHK In 2017, Ant Financial introduced their expansion of service to Hong Kong. They launched Alipay Payment Services (HK) Ltd. and the "AlipayHK" brand as a joint venture with CK Hutchison.[25] They launched a standalone app providing features such as mobile payment and P2P transfer. All transactions are settled and paid with Hong Kong dollar instead of Renminbi.[26] The service is now available in major chain stores such as McDonald's, 7-Eleven and Circle K.[27] Wet markets and other merchants are also further supported.[28] Singapore[edit] In 2017, Ant Financial partnered with CC Financial, a start-up company in Singapore. Alipay plans to expand its 20,000 acceptance points in Singapore, and open up their platform to Singapore banking users.[29][30] Japan[edit] Alipay entered Japan in 2015, with network up to 38,000. Ant Financial hopes that their network in Japan could help Chinese tourists that are heading to Japan.[31] Bangladesh[edit] In 2018, Alipay bought 20% shares in Bangladeshi of the mobile financial service provider bKash Limited.[32] North America[edit] United States[edit] Ant Financial has partnered with First Data in 2017.[33] It allows Alipay service to be used at point-of-sale with more than four million retail partners in United States.[34] Canada[edit] In 2017, Alipay partnered with SnapPay to allow Canadian retailers to accept Chinese currency from Chinese shoppers. There are currently 700 merchants in Canada that supports Alipay, including most Cadillac Fairview mall locations, such as the flagship Eaton Center of Toronto and CF Chinook Centre in Calgary.[35][36] Air Canada began allowing transactions in Alipay to book flights from Canada and the United States beginning in August 2018, after initially rolling out the feature for booking of flights originating from China.[37] Security[edit] Alipay provides multiple security mechanisms to make sure that user accounts are safe. An Alipay account requires the user to set up their own login password and separate payment password, which need to be different. The user can enter the login password up to five times and the payment password up to three times before the user is locked out of his or her account. To regain access to the account, the user must contact Alipay.[38] They also install a digital certificate, which can encrypt information sent over a network, preventing hackers from stealing passwords, thereby enhancing the security of online transactions.[39] Comparison with other payment systems[edit] Alipay is conceptually similar to Apple Pay, WeChat Pay and PayPal because it overlays traditional card payment methods. Although users receive immediate notification of the transaction, the main difference among Alipay and an instant payment system, like Venmo or Zelle is that the funds transfer between counterparties is not immediate.[40] The settlement time depends on the payment method chosen by the customer, while for instant payment systems, the funds are transferred within seconds or minutes.