Enabling Technologies

Alibaba Launches Pay Watch; Powers Mobile Payments at McDonald’s

Alipay to Power Mobile Payments for Global Restaurant Chain McDonald’s:

Global restaurant chain McDonald’s has collaborated with Alipay, the leading Chinese third-party payment provider and a subsidiary of Alibaba Group. The deal will enable mobile payments in 2,100 McDonald’s stores in China.

According to the Chinese e-commerce giant, 54 out of every 100 payments made with Alipay come from mobile devices. The company provides payment services for more than 460,000 Chinese businesses. Alipay provides an escrow service through which consumers can verify whether they are happy with the goods they have purchased before releasing money to the seller. According to China Sales Co., an official global licensed partner and system provider for Alipay, as of January 2015, there were over 900 million Alipay accounts. Among these accounts, 350 million are registered users—almost triple the size of its US rival PayPal.

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The new mobile payment technology will be enabled in the stores across Shanghai city first and is expected to be rolled out throughout the country by March, 2016. With this,  customers can easily pay for their meals in McDonald’s stores by just scanning a QR code on their phone.

Most companies in Alipay’s ecosystem are interconnected and centered around Alibaba’s core e-commerce business. China’s leading payment provider is extending its payment services to a host of offline scenarios, to cover restaurants, supermarkets, convenience stores, taxis and public transports. The company works with more than 70 financial institutions, including Visa and MasterCard.

A press release from Alipay said, “McDonald’s China is looking for further cooperation with Alipay on data technologies, while Alipay will help McDonald’s learn more about its customers, businesses and ecosystems thoroughly and objectively.”

Mobile payment adoption is slowly picking up pace in China. According to IDC, as of Q1 2015, 880 million consumers in China use smartphones with a penetration of 90%; 3G/4G access exceeds 70% even in many rural cities. Prior to McDonald’s, Starbucks has already launched a separate mobile app - Starbucks China - for providing a convenient experience to its customers.

Alibaba Launches Pay Watch:

In other news from the company, Alibaba recently launched its own smartwatch named Pay Watch priced at $110 as an initiative to enter the payment device space. The smartwatch is produced in partnership with Chinese wearable fitness operator FiiSmart.

According to a recent report from Tractica, wearable payment transaction volume will grow from $3.1 billion in 2015 to $501 billion worldwide by 2020.  The market intelligence firm anticipates that, in 5 years, wearable payments will represent approximately 20% of the total mobile proximity transaction volume and about 1% of total cashless transactions in retail.

Pay Watch, the payments focused smartwatch, enables the consumer to make NFC-based payments through Alibaba’s Alipay. The watch is the first in being equipped with the proprietary YunOS operating system, Alibaba’s customized Android system. Merchants will be able to generate on-demand QR codes that they can scan at checkout to facilitate payment.  

Currently, Pay Watch is supported by 20,000 restaurants, 25,000 shopping stores, 30,000 marketplaces and 50,000 hotels. The company plans to make it much more widely accepted by further integrating AliPay in the country’s merchant base.

About Alipay:

Since its launch in 2004, AliPay has become the most popular and extensively used online payment tool for all areas of e-commerce in China and is fast becoming the industry standard. A member of the Alibaba Group, it enables individuals and businesses to securely, easily and quickly send and receive payments online. For more information, visit.

About Alibaba Group:

Founded in 1999, the company operate leading online and mobile marketplaces in retail and wholesale trade, as well as cloud computing and other services. It provides technology and services to enable consumers, merchants, and other participants to conduct commerce in their ecosystem.For more information, visit.

Priti Thakur

Priti has keen interest in digital money and fintech startups . She completed her B-School education this year and likes to write about innovation with respect to digital payments.

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