Alipay
Alipay (simplified Chinese: 支付宝; traditional Chinese: 支付寶; pinyin: zhīfùbǎo) is a third-party mobile and online payment platform, established in Hangzhou, China in February 2004 by Alibaba Group and its founder Jack Ma. In 2015, Alipay moved its headquarters to Pudong, Shanghai, although its parent company Ant Financial remains Hangzhou-based.[1]
Native name
支付宝
Zhīfùbǎo
Worldwide
支付寶
支付宝
Zhīfùbǎo
Zhīfùbǎo
Alipay overtook PayPal as the world's largest mobile (digital) payment platform in 2013.[2] As of June 2020, Alipay serves over 1.3 billion users and 80 million merchants.[3] According to the statistics of the fourth quarter of 2018, Alipay has a 55.32% share of the third-party payment market in mainland China, and it continues to grow.[4][5][6]
Along with WeChat, Alipay has been described to be China’s super-app with a wide range of functionalities including ridesharing, travel booking and medical appointments.[7][8]
History[edit]
The service was first launched in 2003, by Taobao.[9][10][11] The People's Bank of China, 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 accounted 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.[12]
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 publication Century Weekly criticised Ma, who stated that Alibaba Group's board of directors was aware of the transaction.[13] The incident was criticised in foreign and Chinese media as harming foreign trust in making Chinese investments.[14] The ownership dispute was resolved by Alibaba Group, Yahoo!, and Softbank in July 2011.[15]
In 2013 Alipay launched a financial product platform called Yu'E Bao (余额宝).[16] Alipay partnered with Tianhong Asset Management to launch the it.[16] Alibaba (the parent company of Alipay) reported having 152 million Yu'e bao users in mid-2016, with 810 billion RMB (US$117 billion) in funds under management.[17] 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.[18]
In 2015, Alipay's parent company was re-branded as Ant Financial Services Group.[19]
In 2017, Alipay unveiled their facial recognition payment service.[20]
In 2020, Alipay upgraded from a payment financial instrument to an open platform for digital life.[21]
In 2021, the mandate by the Ministry of Industry and Information Technology (MIIT) to open up the "walled garden" ecosystems of the major tech companies has led to the introduction of interoperability of payment QR codes of Alipay and competing WeChat Pay and UnionPay's Cloud QuickPass platforms.[22]
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.[77] 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.
Regulatory concerns[edit]
In September 2021, the Chinese government stated its intent to dismantle the Alipay super app into separate businesses due to concerns over "systemic financial risks" as Chinese e-commerce and fintech firms had begun to amass huge troves of user data for their operations. The move essentially split Ant Group's consumer lending businesses, credit card-like Huabei and micro-loan provider Jiebei, from Alipay’s financial offerings.[78][79][80]
In November 2021, Alipay introduced a new privacy protection feature amid growing concerns over data privacy and after China's Personal Information Protection Law (PIPL) came into effect on 1 November 2021. The PIPL prohibits the unnecessary collection of personal information, abuse of personal privacy, and data exchanges with overseas entities. Alipay's new feature allows users to track how the app collects data about them and is an interactive equivalent to a privacy policy, which explains how an app collects, stores, and shares user data.[81]
Alipay was banned in India (along with other Chinese apps) on 2 September 2020 by the government amid the 2020 China-India skirmish.[82][83]
(in Chinese)
