China’s Alipay launches cross-border payment service for U.S. retailers

16 Oct

The oversea expansion of e-commerce business has become a major focus for Alibaba after its IPO in the U.S. Alipay, an Alibaba affiliate, started working with several American retailers to provide cross-border payment service for Chinese consumers.

A major goal of Alibaba’s oversea expansion is to introduce U.S. and European retailers to Chinese online shoppers, particularly clothes and cosmetics products. Alibaba is also looking to increase brand promotion as well as facilitate shipping in China.

Alipay is now the world’s largest mobile payment service provider with over 800 million users. The company in 2011 spun off from Alibaba and currently belongs to Small and Micro Financial Services Company, which manages a micro-financing business. Alipay still generates an important portion of Alibaba’s income and plays a key role in its business expansion plan. Alipay’s cross-border payment service, called EPass, is poised to threaten Paypal, Mastercard, Visa and American Express.

Alipay has reached an agreement with retailers such as H&M, Uber, Airbnb and Gilt Groupe; Chinese consumers are able to shop on these websites and complete payment via Alipay. Retailers are also able to promote their brands via Alipay and Alibaba’s e-commerce platforms. More and more Chinese consumers are using cross-border payment to shop online, because shopping directly on the retailers’ sites would require an international credit card and cause markups with the international transaction service fees.

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