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Alipay - Alibaba's Payment Arm - 2008 Edition
Maverick China Research, Aug 2008, Pages: 30
This report is a 2008 update from our original Alipay company profile report from September 2007. Alipay, one of the largest and most active online payment companies in China today. In this report, we investigate how Alipay fits under founder Jack Ma's master plan for the Alibaba Group and explain the working relationship between Alipay and its sister companies Taobao and Alibaba.com, two of the largest e-commerce companies in China today.
Although China's Internet market has grown in size to be the largest in the world, payment infrastructure remains vastly under-developed. While credit card and debit cards are widely accepted as a primary channel for non-cash payments in most developed countries, the low overall adoption of bank card payments by both consumers and by merchants in China has jumpstarted the emergence of third-party or alternative payment systems. Furthermore, the discrepancy between the pace of development between payments and internet technologies has created numerous opportunities for third-party payment providers to take a more central role in payments in China.
Online third-party payment systems, while at a nascent stage of development in China, are growing alongside bank card payment networks that are also still being established. While they may not completely replace bank cards as the primary system for non-cash online payments in China, their relatively early emergence in the market allow third-party payment providers, as a group, the opportunity and the potential to take a leading development role in China payments over the next 5-10 years.
Key Findings
-Alipay's main function is to serve as the online payment provider for companies under the Alibaba Group.
-The company charges no service fees to buyers and sellers on Taobao's online marketplace.
-Multi-channel payment options are available to Alipay users, including online bank transfer, cash, and direct debit solutions.
-Alipay has signed partnerships with over 300,000 merchants in China.
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