A Study on Alipay
Alipay, launched by Alibaba Small and Micro Financial Services Group in December 2004, is now one of the leading third-party online payment platforms in China (Wikipedia, 2014). Linkedin (2014) shows that Alipay offers online payment solutions to help the retailers to sell directly to consumers in China and provides an easy and secure way for in individuals and businesses to make and receive payments through the internet and the mobile phones.
According to OnbileTM (2014), Alipay which aims to be the electronic wallet of customers offers a plenty of online payment services without charging any transaction fee. For example, it provides the platform for the customers to make transfers to their bank accounts and other Alipay accounts; it allows people to pay credit card, utility and phone bills with no extra services fee charged and people can also top up for their mobile phone with credit; people can check their accounts’ balance sheet and use it to by any kind of goods such as clothes, tickets for entertainments and transportations; users can use it at online-check-out on many websites (lots of websites it is the only way to pay); they can also use it to chick-out on shopping apps such as Tmall.com and Taobao.com which are escrow services; and it also allow the users to pay for products in-store although this is not as popular as its online payment services. The payment platform now is mainly operated towards to the Chinese customers and all the above transactions are free of charge in China.
2.0 Market and Competitive Advantages
Unlike the development of online financial service in America and Europe, the quick growth of the number of customers that purchasing online financial service starts just in the recent years. The situation is that the Chinese even do not wish to have the credit card. According to Watling (2014), there only 1 percent of Chinese citizens had credit cards in 2004, while the number grew quickly but still less than 10 percent of the population by 2008. There are 564 million Internet users in China which is only 42 percent of the population compared to 78 percent in America (Misha 2013). This differs from the situation as compared to America. People in China are afraid of giving their bank or card details through the Internet. That will be difficult for Alipay to acquire customers unlike its biggest competitor Paypal in the United States. However, Paypal also faces this problem to enter the China online payment services market.
After the operation of Alipay online payment platform, there is a smashing success. Unlike Paypal, which simply transferring money immediately from buyers to sellers, Alipay develops an escrow model that holds the payment in a dedicated account until the customer confirms that the purchased goods have been delivered and were as advertised in order to allay the fear from Chinese citizens who wary about being fleeced by local businesses and individuals (Watling...