With the accelerating “going-global” of Alipay, China’s leading mobile payment service provider, connectivity for digital finance in countries along the Belt and Road is visibly strengthened, better serving consumer needs and driving economic development in related regions.
Payment facilitation with emphasis on localization
Alipay has established collaborations with over 250 financial institutions in 54 countries and regions around the globe, according to Ant Financial Services Group, affiliate of the Chinese Alibaba Group. It offers online payment services to overseas merchants while providing domestic consumers with overseas offline payment services.
As an insightful innovation, nine localized "Alipay" versions have been successfully launched overseas through M&A and fintech cooperation with local payment companies. These versions include AlipayHK in Hong Kong, Touch ’n Go in Malaysia, Kakao pay in Korea, GCash in the Philippines, DANA in Indonesia, Paytm in India, bKash in Bangladesh, Truemoney in Thailand and Easypaisa in Pakistan.
These localized versions have brought enormous changes to people’s lifestyle in related countries. Paytm has become the world's fourth largest E-wallet in the past three years, making QR code-based payment ubiquitous on Indian streets. In Malaysia, Touch ’n Go enables people to get across subway turnstiles with a Scan-to-Pay mobile app. In Pakistan, Easypaisa is used by people without bank accounts as a digital "pay card"...
With an overseas strategy emphasizing localization, Alipay has attracted more and more users worldwide. According to the Q3 financial report in FY2019 issued by Alibaba on January 30, 2019, Alipay and its affiliated companies have had more than 1 billion active users globally by December 31, 2018, becoming the biggest non-social-contact-purposed application in the world.
Better payment experience during cross-border travels
According to the 2018 Trends of Chinese Mobile Payment in Outbound Tourism published by Nielsen and Alipay in January 2019, of all transactions made by the China's outbound tourists, those made through mobile payments represented 32 percent, surpassing the proportion of cash payments for the first time. And the trend of using mobile payment during cross-border travel led by Chinese tourists, is gradually becoming a global phenomenon.
The cross-border offline payment function launched by AlipayHK in March, 2019, has taken the lead in covering China’s Greater Bay Area and Japan, achieving a set of new upgrades including the cross-border remittance through blockchains.
From March on, the offline service offered by AlipayHK has covered over 10,000 merchants in the Greater Bay Area, including convenience stores, shopping centers, tourist attractions, schools, hospitals, subways, highways, etc. In Japan, payment through AlipayHK has been accepted by Hakata Daimaru, the biggest department store in Fukuoka, a main large city in the Kyushu Island.
In the above areas, Hong Kong users who have been certified by AlipayHK or have bound their bank cards to this app can directly scan the blue QR code to make payments. The payment is made in Hong Kong dollars, but what merchants receive is in renminbi or Japanese yen. Users of the app can also enjoy preferential exchange rate, free service charge and unlimited transactions, and their money can be returned to their original accounts if there are any refunds.
For China, the fact that Hong Kong capital can now be transferred abroad via AlipayHK will not only accelerate the connectivity for electronic payment system infrastructure in the Greater Bay Area, but also increase the transparency, compliance and safety of cross-border payment, according to Yang Tao, assistant director of the Institute of Finance and Banking under the Chinese Academy of Social Sciences, also deputy director and researcher of National Institution for Finance & Development. Yang pointed out that with this new service, the capability of risk prevention and control in payment sector will be improved, and regional bottleneck for local capital will be gradually removed, boosting high-quality opening-up.
Alipay is determined to expand the offline function to more local wallets in a near future, making users of other localized Alipay versions across the globe enjoy the convenience and benefits that outbound Chinese visitors have already experienced. If this can be realized, Alipay, a business card for Chinese mobile payments, can better contribute to the connectivity of payment methods, boosting economy, trade and people-to-people exchanges in different countries and regions.
Assimilate international experience to facilitate global finance services
Alipay is also stepping up its globalization by actively assimilating the experience of leading payment companies in the world. On February 14, 2019, WorldFirst, a British cross-border payment company headquartered in London, announced that it had completed its ownership change to become a wholly-owned subsidiary of Ant Financial Services Group, formally reaching cooperation with Alipay. The transaction capital of the acquisition is estimated at around 700 million U.S. dollars, according to a report which first revealed the deal at the end of December 2018
WorldFirst is a time-honored UK payment company founded in 2004, which has more than 80,000 active customers and an annual transaction volume of over 10 billion UK pounds, according to its official introduction. Currently, its main businesses include international remittance, foreign exchange options trading, international e-commerce platforms collection and exchange settlement. It can support 71 global online sales platforms such as Amazon (North America, Europe, etc.), eBay, Rakuten Global Market in Japan, and it can also support VAT payment in Europe.
The vast common ground of the two payment giants makes their cooperation a promising move. Before the acquisition, WorldFirst has already cooperated with Alibaba's overseas e-commerce platform Lazada to provide international payment services to merchants in Indonesia, Malaysia, the Philippines, Singapore and Thailand. In addition, it is predicted that WorldFirst's international remittance business will also contribute to Alibaba's global promotion.
Jonathan Quin, founder and CEO of WorldFirst, promised that after the acquisition, the quality of products and services that WorldFirst provides to its global users will remain unchanged, and expressed the will of better serving small and micro businesses worldwide with the strength of Alipay. Ant Financial Services Group echoed this determination in a later statement, and added that the cooperation will help promote inclusive financial services across the globe.
Earlier, Ant Financial Services Group has already exported fintech technologies such as supply chain finance and cross-border remittance through blockchains to many of its overseas localized "Alipay" products, playing an important role in facilitating global finance. (Contributed by Li Wenxin)