China’s Alipay Said To Have International Plans For Its Online-Payment Service

E-commerce provider Alibaba Group Ltd. reportedly is preparing to expand access to it Alipay online-payments platform to countries outside of China within the next three months.

Alibaba Group declined to comment to PaymentsSource on news reports about its purported plans. If the reports are true, overseas users would be able to use Alipay directly on Alibaba’s e-commerce sites, including Taobao.com and Alibaba.com, to make online purchases.

Currently, only consumers living in Hong Kong, Taiwan and Macau may use their Visa- and MasterCard-branded cards with Alipay, while those in China also may use their China UnionPay-branded cards.

Alipay is the world’s biggest online-payment platform with 600 million users, Meng Zhang, an analyst from Beijing-based research firm Analysys International, tells PaymentsSource.

“This payment service will play a strong role in promoting Alibaba’s expansion into the international market,” says Zhang. “It will be a more convenient clearing channel for small and medium enterprises trading internationally.”

However, PayPal Inc. likely would not face a threat from Alipay immediately because of its richer experience in processing international credit card payments and significant market share, Zhang says.

Other Chinese online-payment providers, including Tencent Holdings Ltd.’s Tenpay, also have been preparing to expand internationally, says Zhang. “If Alipay takes the lead in achieving cross-border payments, others will follow immediately,” he says.

Tencent last month reached an agreement with American Express Co. to offer Tenpay users an ability to shop with retailers outside of Mainland China. The deal will allow Tenpay users in China to buy goods from U.S. and United Kingdom-based online retailers through Globalshop, a global e-commerce and shipping service (see story).

In July, Alibaba Group announced it is working with Western Union to develop an online-payment platform called Western Union Quick Pay (see story).

According to data from Beijing-based research firm Analysys International, Alipay, the Alibaba Group's payment platform, commands 45.5% of the market, followed by Tenpay, with a 21.2% market share.

What do you think about this? Send us your feedback. Click Here.