Alipay, the payments subsidiary of alibaba group Holdings Ltd., is extending its payment services to Western retailers starting with U.S. It has launched a new service dubbed as “ePass” which would enable U.S. retailers to e-commerce shoppers in China. ePass doesn’t offer a translation service as of now, so initially it would target shoppers who know English well.
The new service would help U.S. retailers target around 500 million Chinese online shoppers. Last year, this customer base spent around $298 billion on online marketplaces. ePass comes at a time when online payments solutions are witnessing significant growth globally. Current scenarios like eBay spinning off PayPal and Apple launching Apple Pay clearly signify this growth. Moreover, cross-border online shopping is on the rise which PayPal forecasts that it could surpass $300 billion within next 5 years.
Chinese online shoppers already had the option to buy from goods on U.S. retailers’ websites. But they had to pay using an international credit card which would attract additional transaction charges. The ePass service has been designed to eradicate such issues. The new payments service involves the following procedures:
- During checkout at online stores, customers will come across ePass as a payment option.
- Chinese customers will be prompted to pay in yuan using their Alipay account.
- The support for 14 different currencies and aid of over 180 financial institutions would enable the amount paid to be transmitted internationally.
- Custom duties would be included in the transaction amount when user checks out.
Thus the ePass program addresses issues like currency exchange, customs, and shipping logistics for Western retailers seeking to cater to Chinese online consumers. Alipay is also offering marketing assistance to U.S. retailers that are trying to reach out to Chinese consumers and don’t wish to open physical stores in China.
Gilt Groupe, a fashion and lifestyle e-commerce site, will be among the first to use the ePass platform. According to Alipay, Chinese consumers spent about $33 billion on overseas websites last year. With Alipay’s new service, this number is poised to increase in the coming year.