Alipay To Invest $79 Million To Create ‘Square-like Payment Devices’

Update: We have included the Alipay COD device pictures below.

We received news from Alipay about its plans to invest RMB500 million (US$79 million) to upgrade China’s cash-on-delivery (COD) payment infrastructure. That sounds like a hefty task but it becomes clearer after the details are explained a little.

In short, Alipay is working on a portable Square-like payment device. Yes, those awesome little devices which allow you to pay on the spot right after you receive your goods. But it doesn’t look like Square. An Alipay representative told me that the the Alipay COD devices looks very different from it. “It looks similar to an ordinary point-of-sales machine that you would see at a department store,” she added. That makes me wonder how it would be portable, but Alipay will update us with a picture soon.

Alipay states that 70 percent of the transaction volume, excluding Tmall, is paid at the time of delivery. And most of these payments are made in cash. So there is a time gap between the information received for payment and goods delivered. The new device, as explained by Dong Xiaoling, general manager of Alipay’s B2C Business Unit, will allow goods and payment to be received simultaneously. More from her:

Alipay’s COD solution will allow merchants to receive payments within 24 hours of delivery, faster than the current industry practice which can take several days.

Alipay plans to have 10,000 of these devices in the first half of 2012 in all first-tier cities — Beijing, Shanghai, Guangzhou etc. Second tier cities will get to see them by the end of 2012. So far, Dangdang, one of the largest e-commerce players in China, has already started implementation of the Alipay’s Square-like device. It’s a neat initiative and a smart move. And it will be a huge relief to Apple users since most e-commerce stores don’t support mac. Only Alibaba Group (which houses Alipay), has the muscles and reach to pull this through.

Alipay COD Device