The ultimate guide of Alipay
What is Alipay?
Alipay is a mobile payment solution launched in China in 2004 by the Chinese e-commerce giant Alibaba. Alipay has achieved unprecedented success by crossing the 1 billion users mark, with an average of over 661 million daily active users in 2022.
In China, Alipay has become so popular that even small street vendors accept it. Alipay is therefore used to pay for almost everything in the country (taxi, bills, a restaurant meal, or even e-commerce purchases, etc.).
The app is linked to the user's bank account. Whether it is for money transfers between individuals, payment in shops, access to administrative services, stock market investment, or booking an appointment with the doctor, users have everything at hand on this single app.
Alipay’s story
Alipay was first launched in the Taobao e-commerce platform to establish security and trust between the seller and the buyer when buying online.
Alipay held the buyer’s money until he received his product, only then the money was wired to the merchant. This way Alipay was able to gain the Chinese consumers’ trust which holds an important place in the Chinese culture.
By the time the mobile payment market evolved and consumers were ready to pay via e-wallets in face-to-face situations, Alipay already had a large user base.
Why is Alipay so popular in China?
Unlike in Western countries, credit cards adoption in China has been slow and the penetration rate is still very low for cultural, social and economic reasons. Mobile payment has gained significant market share to replace cash as it offers more advantages and suit consumers’ and merchants’ needs.
Mobile payment offers a frictionless, easy and fast user experience. Users prefer the convenience of this payment method. This trend, combined with a national digital revolution, and the growth of cheap smartphones, have contributed to the development and success of Alipay.
Mobile payment is based on QR codes which means that the merchants can accept payments without investment in hardware, as is the case for credit cards. Even small street vendors can accept Alipay since they do not need any hardware like a card reader. All the merchants need is a QR code, put it in front of their customers and anyone can make a purchase in the blink of an eye.
Moreover, the largest Chinese e-commerce platform, Alibaba, has seen an increase in its annual active consumers, reaching 742 million by the end of June 2020. Alibaba shoppers find it more convenient to use Alipay on Alibaba’s e-commerce platforms.
Alipay in numbers
Number of unique users: 1.3 billion users (2022)
Number of daily active users: 320 million (2022)
Alipay’s share of China’s mobile payment market: 54% (2022)
How does payment via Alipay work?
The payment via Alipay is done through a simple QR code scan. There are many ways to pay or accept payments via Alipay. Alipay can be used in a physical store or online on an e-commerce Website or a mobile app.
In a physical store, a merchant can choose to accept Alipay payments via:
A POS terminal
A static QR code
A cash register software
A mobile app
Alipay can also be accepted online in your e-commerce Websites. In this case, the customer either makes the transaction from desktop or mobile.
In our Alipay page, we explain in detail how does Alipay work in a physical store and online via each method.
How Alipay is adopted outside of China and what does it mean for overseas merchants?
E-wallets, the preferred payment method of Chinese tourists:
Nearly 80% of Chinese consumers used mobile payment in 2022. At the same time, the use of cash and bank cards decreased from 31% to 25% year on year.
Thus, the international expansion of mobile payment providers such as Alipay and WeChat Pay is good news for overseas merchants.
A survey also shows that in 2019, 58% of merchants in Singapore, Malaysia and Thailand said that the traffic to their store increased after adopting Alipay, while 56% of merchants claimed an increase in sales.
The merchants surveyed declared that, just like Chinese travelers, they find Alipay easy to use and an increasingly important way to draw Chinese tourists to their stores.
In a report published in 2019, Nielsen found that over 93% of Chinese tourists are willing to make purchases through their smartphones and would even increase their spending if the store offers mobile payment such as Alipay or WeChat Pay. The study was done before the Coronavirus outbreak. During the pandemic, Chinese citizens were advised to use mobile payment when in physical stores or buy online. The pandemic has transformed China into a super-connected country driving it to become a cashless society.
Accepting their preferred payment methods is the best way to welcome Chinese tourists again after the Coronavirus pandemic is over.
Alipay has a strong presence in Europe:
Alipay has launched its operation overseas in 2016 to accompany the increasing trend of overseas travels of Chinese tourists. Alipay first targeted East Asian countries such as Japan, Korea and Thailand, then has entered the European market in later 2016.
As of May 2019, Alipay was accepted in 55 countries and regions around the world, including 29 in Europe. Today Alipay is accepted in 110 countries globally.
In 2019, Alipay launched the "E-wallet collaboration" with six European e-wallets: the Austro-German Bluecode International, the Finnish ePassi and Pivo, the Spanish Momo Pocket, the Portuguese Pagaqui and the Norwegian Vipps. These six start-ups have five million users in ten countries (Austria, Germany, Spain, Portugal, Finland, Sweden, Denmark, Norway, Iceland and Slovenia).
In France, Ant Financial has partnered with payment terminal manufacturers, including Ingenico, to adapt the equipment at the cash register. The goal is to increase the number of merchants who accept Alipay in Europe and allow Chinese clients to preserve their payment habits abroad or while purchasing goods online.
4 years after its launch in Europe in 2016, Alipay is now accepted by thousands of merchants in Europe (Luxury brands, restaurants, hotels, monuments, pharmacies, supermarkets…). You can take a look at some of our clients who accept Alipay.
Alipay will have no problem convincing European merchants of its potential in terms of customer base and technological solution.
Alipay is a leader in e-commerce transactions
Even when they can’t travel to Europe, Chinese consumers are not willing to give up on their preferred brands from abroad. Chinese shoppers have become more and more open to purchasing from foreign Websites. 27% of e-commerce transactions have been made on French e-commerce stores. And 45% of the total e-commerce transactions made by Chinese shoppers are done via Alipay.
According to Eric Jing, President and CEO of Ant Financial, the company is constantly aiming to improve the way in which individuals and businesses buy, sell, and receive payments, and to do this, they are strengthening their partnerships around the world. Thus, businesses in Europe can accept Alipay online and sell their products in China without the hassle of creating a company in China or having a Chinese bank account.
Silkpay, Alipay’s partner in Europe, helps European e-businesses to easily accept Alipay in their online stores, enhancing the service to the growing number of Chinese e-commerce buyers. You can open a Alipay account as of today at Silkpay
7 reasons why European merchants should accept Alipay?
1. Open up to a market of a billion customers
In 2022, Alipay is leading the mobile payment industry in China. It continues to maintain its leading position with a market share of 54%. Partly, this is because Alipay is more suited to local needs. This better understanding of the Chinese market gives Alipay a significant advantage compared to payment solutions such as Apple Pay that does not consider these Chinese consumption specificities. As a result, the app is now used by 1 billion users worldwide, including 300 million users outside China.
2. Increase your visibility:
Every day, the platform generates millions of visits, which is why, far beyond a simple payment solution, the service has become a real showcase for shops. Chinese consumers are also using the app to stay updated on the latest trends. The brands referenced on Alipay gain significant visibility. Thus, they gain important traffic to their online and physical stores.
Get customers to discover your store through the geolocation feature of Alipay. Customers can see a list of stores that accept Alipay in the location they want. This drives important visibility to your store.
3. Alipay: A cross-border commerce facilitator
Thanks to Alipay's worldwide reputation, this payment method is now the largest facilitator of cross-border trade across the globe. Alipay now provides payment services for millions of merchants around the world.
Besides, European merchants do not necessarily need to be present in China’s largest e-commerce platforms (TMall or JD). Europeans are increasingly using Alipay to sell online directly to their customers in China, taking advantage of the already established sales features the app offers. Alipay is also supporting settlements in 12 different foreign currencies: USD, EUR, JPY, GBP, CAD, AUD, SGD, CHF, SEK, DKK, NOK, HKD. Merchants outside of China don’t have to worry about accepting payments from their clients via Alipay in their local currencies. Our team has prepared a free demo to show merchants how they can use Alipay to sell directly to Chinese customers and drive revenue.
4. Accept the most popular e-wallets in Asia through Alipay:
Thanks to Alipay’s partnerships around the world, merchants accepting Alipay can benefit from its partnership with the most popular Asian e-wallets.
European merchants can accept payments from consumers from Indonesia, the Philippines, Bangladesh, Pakistan, India, Malaysia and South Korea, through Alipay only. This multi-wallet acceptance means merchants across Europe will be able to drive increased traffic and spending from tourists from across Asia.
5. Reduce transaction costs and no risk of charge-back:
Alipay offers the best exchange rate of Yuan (RMB), the Chinese local currency, which is appreciated by shoppers. On the merchants’ side, there is no charge-back with Alipay, and the transaction’s cost is much lower compared to other payment methods. The transaction is completely free for shoppers.
6. Automatic customs declaration for cross-border e-commerce sales:
Alipay also offers the possibility of automatic customs declaration which comes in handy for cross-border e-commerce sales. By integrating Silkpay’s Alipay online solution, the e-commerce merchant can declare automatically each sale and delivery to Chinese customs.
7. Increased trust and security for online payment
As Alipay was created to facilitate online transactions on Taobao, the e-commerce platform of Alibaba, Chinese consumers consider payment via Alipay online safer and more reliable. In case of a problem with their overseas online purchase, they can always contact Alipay’s service team in Chinese to sort out the issue. Also, Alipay guarantees against any fraud for both shoppers and merchants.
How to use Alipay marketing for your digital strategy?
Alipay goes beyond a simple payment app, and offers a countless number of benefits to merchants:
1. Alipay storefront:
Alipay Storefront is a geolocated and personalized virtual shop on the Alipay platform. It drives users to your store via product displays, promotional offers and marketing campaigns. By opening a storefront, Alipay users can know more about you.
Storefront features include:
Basic store information
- Photos of your physical store and product photos
- Store address: Users can use Alipay’s navigation to head to your store using their phone
- Contact information: On your store’s profile, customers will find your phone number, email or even a link to your Website or social media account.
Reviews:
The Alipay app allows your customers to leave reviews. Through your storefront, you can let your customers know what people say about you.
2. Alipay coupons:
In China, a generation of "coupon hunters" has emerged to effectively influence the consumption habits of a billion consumers.
For the "coupon generation", the coupon hunt has become a lifestyle. Used to filling up their wallets with all kinds of discount and loyalty cards, some Chinese consumers even get up early on the morning to queue up and take advantage of preferential rates on cinema tickets. Others take advantage of these offers to collect free products and samples.
Alipay turned this lifestyle into his success key ingredient by allowing each merchant accepting Alipay to put their own promotional coupon online. Indeed, each point of sale referenced on Alipay has the possibility to create coupons for its future customers.
Once published, the coupon appears on the merchant's Alipay window and is also highlighted on the "City page" (by default, the homepage of the city where the user is located and where the store is located). This maximizes the visibility of the coupon to a qualified target.
3- Alipay’s geolocation feature:
By opening an Alipay account, you'll automatically benefit from the geolocation feature built into the app. Chinese customers can find and get to your store thanks to this feature.
It offers the possibility for merchants to geolocate their shops, the application displays to users nearby merchants who accept their payment methods. Alipay also helps merchants promote their business activity through promotional coupons or banners. Very good news for merchants wanting to let their Chinese clientele know that they accept their preferred payment method.
4- The keyword search:
Thanks to the search bar, Chinese tourists can find your store depending on the category they search for, which makes your business stand out when searching for products and brands.
How to create an Alipay account as a European company?
If you are a European company and want to start accepting payments from your Chinese customers, you need to pass through an authorized third party like Silkpay. Alipay only authorizes merchants in Europe to integrate its payment methods through a third party both for Alipay in-store or Alipay online.
Silkpay, partner of Alipay, helps merchants in Europe accept Chinese most popular payment methods (Alipay, WeChat Pay and UnionPay) both in-store and online.
Our Silkpay package
Accept Alipay payment method with Silkpay
By choosing Silkpay, partner of Alipay in Europe, you improve your customers’ trust and increase your conversion rate and protect you against fraud.
Silkpay provides omnichannel payment solutions so that its merchants can offer the best payment experience to their customers.
Benefits of our Alipay payment solution
- Chinese mobile payment specialist
- Expert in omnichannel payment and QR code payment
- Easy-to-integrate solution
- No account opening fees, no maintenance fees, no hidden fees!
- We offer competitive pricing. Contact us to check out our Alipay pricing
- Support by phone, live chat and email
- Our merchants are protected against fraud
- A dedicated backoffice where you can view and manage all your transactions
Entrust us with your Alipay marketing project
Our team accompanies you from scratch on the deployment of your Alipay marketing strategy.
- We create and update your shopfront
- We create customized banners for your brand
- We create customized coupons for your brand
- We take care of your video creation
- We guarantee good referencing and visibility for your store in Alipay
How to start with Silkpay?
You can leave us a message via our Website’s contact form, our team will contact you back very shortly.