February 10, 2014
These last few years have seen the birth of many mobile wallets – ZooZ, Weve, Allied Wallet, Monitise, Zapp and bigger players such as Paydiant, Isis and Google Wallet. PayPal is known as the Big Daddy of the payments industry. According to an announcement by Chinese payments giant Alipay however, the company is now the largest payment provider globally in terms of transaction volume as well as registered user base.
Alipay is an online payment services provider founded by the Alibaba group in 2004. The system allows individuals and businesses to make payments online in a secure manner. Alipay’s users are primarily buyers and sellers engaging in e-commerce transactions. Alipay has partnered with some leading Chinese banks includingBank of China, China Construction Bank, Agricultural Bank of China, the Industrial and Commercial Bank of China and Visa.
Over 100 million registered mobile users have completed more than 2.78 billion transactions on Alipay Wallet. In addition, during the recent seven-day Chinese New Year holiday, when banks were closed, Alipay Wallet users made over 100 million transactions on their phones, accounting for 52% of total online payment deals, Alipay stated on its official Weibo Account. The total volume of Alipay’s mobile payments has surged past 900 billion yuan, or $150 billion, surpassing the combined volume of U.S.-based rivals PayPal privately held Square Inc., which was about $50 billion last year.
According to data from data analysis and online tracking firm iResearch, the total transaction volume by independent mobile payments services from China increased by 707%, rising to $201.2 Billion (1219.74 Bn Yuan) in 2013. Its surprisingly high. Alipay, a subsidiary of Alibaba, accounted for 75 percent of the country’s mobile payment market as of June. Alibaba Holding Group Ltd is a network of e-commerce B2B businesses constituting an online marketplace, shopping search engine, retail and payment platforms and more. It is led by chairman Jack Ma, whose net worth is $3.6 Bn.
Alipay provides solutions for Taobao and Alibaba.com along with over 500,000 external merchants for virtual gaming, online retail, digital communications, airticketing, commercial services and utilities fee payment transactions.
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The only area that Alipay seems to be struggling is in their rivalry with Tencent’s social media platform WeChat. Alipay partnered with Sina Corp on January 7th, 2014 to launch an online payment service. This move was to compete with Tencent’s successful monetization spree with WeChat app. On 28th January 2014 – ahead of the Chinese New Year celebrations – Tencent launched the New Year Red Envelope app on its social media platform, WeChat. The app went viral. WeChat has been dubbed as Jack Ma’s Nightmare. Alipay recently unveiled its first three mobile games in a bid to strengthen its campaign against the force known as WeChat.