Introduction to Alipay
- On September 10, 2014
ChinaSEO are global licensed providers and System Integrators of Alipay Online Payment System.
Alipay is owned by Alibaba, China’s number 1 e-commerce company.
Alipay is a online debit system, whereby users must pre-pay RMB (Chinese Yuan) credits into their Alipay accounts then they can spend these credits with merchants whom have Alipay accounts.
HOW BIG IS ALIPAY?
Alipay is the number 1 online payment system for China. Alipay accounted for approximately 50% of all Chinese RMB transactions in 2013. *Approx. USD $760 Billion was handled via the Alipay system. As of August 2014 there were 800 million registered accounts.
Ten Pay (owned by Tencent) and China Union Pay account for 2nd and 3rd,.
Other major foreign players, such as Visa, Mastercard, Amex, SecurePay and Pay Pal combined accounted for less than 2% of all RMB transactions.
Alipay is the-preferred payment system for Chinese, if given option of payment via Credit Card, or Alipay, or cash (eg: dollars) then they will always prefer Alipay. This allows them to save on transaction fees, plus, gives buyers convenience of using RMB currency to make purchases overseas.
WHY DO CHINESE PREFER ALIPAY OVER OTHER PAYMENT SYSTEMS?
For users Alipay is “safer, faster, cheaper and better” than using credit card or cash/ bank wire transactions. Users can easily pay merchants just by via their mobile phones.
There are no limits for merchants on amount received.
Merchant does-not require Chinese language pages on their website or sales materials.
Any merchant that has a) a website with a connected email address, and b) a bank account can apply for Alipay.
Alipay has the right to refuse merchant accounts if the business is deemed “not-preferred.”
Examples of welcome-business are: online shops, travel and tourism destinations and related services (hotels, rental companies), education, cosmetics and health related products.
Examples of banned trade includes: weapons, pornography, gambling credits, drugs or prescription medicines and financial products.
HOW DOES IT WORK?
- Account holder must have a “send” Alipay account with credits, and merchant must have a “receiving” Alipay account
- Account holder chooses purchase.
- Account holder pays purchase from Alipay credits.
- Credits are then instantly paid into Merchant Alipay account.
- If Merchant is offshore, then Alipay will immediately convert RMB purchase into local merchant preferred currency (14 options).
- Alipay converts at commercial (not retail) flash-market –currency rates, and does not add currency exchange fees.
EXAMPLE OF O2O (ONLINE TO OFFLINE) IN-STORE ALIPAYMENT PURCHASE:
Chinese buyer travelling overseas wants to make a purchase inside a shop.
Decides what product to purchase.
Shop assistant directs buyer to Merchant’s own Alipay account (can be via QR code) on desk/ visible in store.
Buyer then using their mobile phone logs into Alipay account, enters the required amount then presses “send”.
Merchant than instantly see credits moved into merchant account.
Shop assistant verifies receipt (can be via printed email, or checking receipt and payment reference with buyer).
Merchant then hands over purchase as credits have been receieved.
HOW DO I GET AN ACCOUNT?
Merchants must request applications and then complete applications forms.
Forms are then checked and sent and approved. Once approved, then merchant is issued with unique merchant Alipay code that System Integrator then inserts and tests. Once tested and live, Merchant can then begin receiving funds. The whole process takes 2-3 weeks.
All original documents:
1 x Alipay Merchant application form
4 x completed application agreement contract (4 signed copies)
1 x a signed colour copy of their business registration
1 x refundable* installation fee of USD $3,000
Official Alipay supplier must confirm documents and also sign.
Original documents are then reviewed by Alipay, credit checks and business checks are completed.
After 2 weeks (approx.) approved * merchant will receive a unique code that must be attached to their website.
Code is then inserted and tested (by Official Alipay supplier).
Merchant can then begin to receive Alipay credits.
*if code can-not be inserted, or merchant is refused by Alipay, then Official Alipay installer will return merchant a full refund less bank fees.
ANY ON-GOING FEES?
Alipay does not-charge currency conversion fees, it is “better than banks.”
Alipay charges merchants a flat 3.5% per transaction.
Alipay has a minimum settlement limit for cross-border purchases, currently USD $5,000 (or equivalent) must be received into Merchant Alipay account before amount is wired into the merchant’s account.
HOW DO I APPLY?
Contact your local regional official Alipay supplier. ChinaSEO Ltd. is China’s oldest digital marketing agency and globally licensed Alipay System Integrator.