In the US, when people think of online payment services, there’s really not much to think about at all. Most of us simply bind our credit cards to whatever e-commerce site we’re using, or do the same with PayPal.
In China however, third-party payments have become an increasingly competitive space. The three China tech giants – Baidu, Tencent, and Alibaba – have each offered their own online payment services for quite some time, and continue to add features to them in hopes that consumers will drop their cash in their particular money pot. In the case of Tencent, that would be WeChat Payments, the WeChat extension of Tencent’s earlier Tencent Payments. In the case of Alibaba, that would be Alipay and Alipay Wallet, which originated as “PayPal for Taobao” but is now aspiring to disrupt consumer banking and offline payments.
Alipay currently occupies 60 percent of the market for third-party payments, but that could change. Over the past six months, now that Alibaba and Tencent have entered a heated competition over all things mobile, social, and e-commerce related, both companies have continued to soup up their mobile payment services. Whereas tricked-out payment apps for splitting bills and transferring money have appeared many times outside of China – yes, PayPal is in on the game – the space remains fragmented and there have been few wild success stories. In China, meanwhile, the affiliation with Taobao (think Amazon) and WeChat (think WhatsApp), helps ensure that most users have the apps on their phone – which then opens the door for all sorts of possibilities. Moreover, given the ubiquity of QR codes in China, domestic consumers have already shown they are comfortable merging the wild world of the mobile internet with the real world.
Alibaba this week released a version 8.0 update of its Alipay Wallet app, which brings a revamped interface along with a few new features. In an effort to provide a visual anchor to this constantly evolving space – you can be sure you’ll hear more about it from us this year – we’ve done up a screenshot-based guide to Alipay Wallet, with some partial translations, that will hopefully help illustrate the relationship between finance, e-commerce, and social media in China.
It’s not a wallet, it’s a superwallet
Alipay Wallet lets you know it wants your money as soon as you open the app. If you haven’t yet binded a bank card to it, you’ll be greeted with no less than three bonus incentives (two, really) to transfer your money over to the app.
Alibaba has been very aggressive in implementing on-site, real-world payments using Alipay Wallet. But unlike the Square Reader or NFC, Alibaba’s offline payment technology is decidedly un-sexy, but likely just as efficient.
Let’s say you’re at a convenience store in Guangzhou (where Alibaba has partnered with a major c-store chain Meiyijia) and want to buy a bag of chips using Alipay Wallet. By pressing “Pay money” under “On-site payments,” you’ll be presented with two different methods to make the transaction. One method uses sound wave technology – pressing a button causes the phone to emit a sound wave which, when directed towards a sensor causes the payment processor to extract funds from the Alipay Wallet. Alibaba tells us that sensors cost RMB 50 (about $7) a pop for retailers.
Alternatively, Alipay Wallet will generate a barcode, or a QR code, merchants can then scan using compatible equipment. Alibaba states it will integrate Alipay into merchants’ payment systems for free.
To date, Alibaba claims to have Alipay services integrated with over 30,000 storefronts nationwide.
The Yu’ebao pitch
Winning over wallets
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