Integrating Alipay

Thursday 15th August 2019

Digital payments often refer to payment processing and point of sale solutions, and e-payments are digitising the methods in which a customer and merchant can send and receive money from one another.

With the Big 3 - Android (not to exclude Samsung, Google and its platforms), Apple and Alipay seizing the e-payments market with omnichannel integration and cross-channel marketing, and seeking to satisfy a reported 85% growth in customer demands; it is only right to explore a case study of true pioneering in global payments and cross-border payments.

With 93% of consumers owning a smartphone and 53% considering the use of technology such as smartphones essential to their daily lifestyles, offering new digital wallet options to shoppers ranks as a top 3 priority for retailers this year.

**Who Are Alipay?**

Founded in Hangzhou, China in 2004, Alipay has grown to be a competitor to Apple and Android in the East, with a global presence valued at $600bn in 2013. Alipay not only enables Chinese commerce abroad but ranks alongside its competitors for payments. With a considerable platform, Alipay had a 48.7% share of the third-party online payment wallet market in 2013.

For the most part, Alipay is a mobile and online payments platform, but in certain geographical regions, has enabled the option to facilitate lifestyle capabilities such as booking transport and purchasing services in-app.

Operating in-store and online on a global level, Alipay is available in 110 countries; with in-store payment functionalities in 40 countries and over 80,000 retail stores.

With over 100 million daily transactions and 900 million active users, the integration of Alipay into the list of your accepted payment methods means the acquisition and conversion of more customers and sales in-store and online.

**Conversion Is A Problem:**

Cart rate abandonment is an issue for merchants across the e-commerce space. As 67% of consumers will abandon a purchase; the main causes have been identified as lack of payment methods and the futility of having to enter lengthy forms with customer information.
Sage Pay conducted a survey of small and medium organisations to illustrate the benefits of mobile commerce in retail.

Within the past year, 50% of retailers had optimized their businesses for mobile browsing, with 25% of these having additionally created an app to streamline the checkout flow.

As UK banking is expected to rise from 17.8 million users (2014) to 36.2 million users in 2020; the total value of transactions being moved through apps such as Alipay, is expected to reach £3.4bn a week in 2020. This is up from £1.7bn a week in 2014 within the UK.

Primed for this increase, Alipay is partnered with over 200 financial institutions across the globe, including; China Domestic Bank Card, Visa, MasterCard and JCB. Alipay has ascended past a financial settlement option for Chinese customers at home and abroad.

**How Does It Work?**

Considered one of the most encrypted e-payment methods available, Alipay offers consumers and retailers a frictionless method of payment for both standard and one-click payments online using QR codes over the popular NFC technology.

This is an opportunity for merchants to increase security, reduce abandonment at checkout and increase loyalty to their merchants.

In offering standard and one-click payments, consumers can choose to have their card information tokenised to enable ‘remember me’ options. Equally, retailers and merchants can still request the CVV or CVC digits at each transaction - per their security preference.

Mobile payments also classify as one-click in some circumstances where CVV is required, or within Alipay using the tokenised QR code.

Standard payments are offered at desktop where a customer can traditionally login to their Alipay account with their credentials to complete a transaction.
However, only 20% of Alipay customers choose to do this over the Alipay web option, wherein a QR code is scanned via their mobile to complete the purchase.

When asked, 34% of consumers (in a study of 5,950 over 12 countries) said they would be more loyal to a retailer that offered one-click purchase options.

**Alipay At Mobile:**

The customer selects Alipay from the list of payment options available to them.

Alipay will open and after reviewing the details of the transaction presented to them.

The customer will either enter a pin/password or confirm the password with Touch ID.

The customer will be directed to a page confirming that their payment has been successful.

**Desktop To Mobile:**

When selecting Alipay as the payment method, a QR Code is generated on the desktop and displayed to the customer.

They then open Alipay on their smartphone and scan the QR code where they are then presented with the details of the transaction.

Using their TOUCH ID or pin/password to confirm the payment, the customer is then directed to a confirmation of payment page.

**This is a successful cross-border payment that 80% of Alipay customers use.**

**Alipay Currently Offers Settlement Currencies In:**

Australian Dollar (AUD)

United States Dollar (USD)

Great British Pound (GBP)

Euro (EUR)

Singaporean Dollar (SGD)

Hong Kong Dollar (HKD)

Danish Krone (DKK)

Japanese Yen (JPY)

Swiss Franc (CHF)

Canadian Dollar (CAD)

Norwegian Krona (NOK)

Swedish Krona (SEK)

**Alongside Processing Currencies In:**

Australian Dollar (AUD)

Canadian Dollar (CAD)

Euro (EUR)

Great British Pound (GBP)

US Dollar (USD)

Czech Koruna (CZK)

Danish Krone (DKK)

Norwegian Krone (NOK)

Swedish Krona (SEK)

Singapore Dollar (SGD)

Swiss Franc (CHF)

**Alipay Accepts E-Commerce Payments In:**

Australian Dollar (AUD)

Canadian Dollar (CAD)

Swiss Franc (CHF)

Danish Krone (DKK)

Euro (EUR)

Hong Kong Dollar (HKD)

Japanese Yen (JPY)

Malaysian Ringgit (MYR)

Norwegian Krone (NOK)

New Zealand Dollar (NZD)

Swedish Krona (SEK)

Singapore Dollar (SGD)

Thai Baht (THB)

US Dollar (USD)

**Benefits Of Alipay:**

As lengthy payment forms amount to a major part of the £257bn annual loss of retail sales globally, Alipay is a frictionless method of taking payments online and in-store. With the added bonus of eliminating friction almost entirely for its Chinese customers living and travelling abroad, there is no worry about the loss of sales when a consumer’s geo-demographic changed.

Whilst Alipay is the ultimate omnichannel functioning app, Apple and Android Pay have the Western preference.

Alipay came out of China where cash was king over credit. Whereas, in the West, NFC further secured credit and debit card payments in the west before expanding into mobile payments.

With checkout friction estimated to cost an aforementioned £257bn annually across the globe, keeping the consumer at the centre of a transaction with a seamless payment flow is reported to be a missed opportunity is sales to the tune of £2.6 trillion around the world.

Not only do 91% of retailers think that offering multiple payment methods online is essential in reducing checkout friction on top of reducing the gap that allows for buyer’s remorse, but as e-commerce sales grow from 1/5th to 1/3rd of all sales in the next 3 years; fraud will grow with it. The authentication and tokenisation elements afforded by mobile payment options such as Alipay is a necessary option for retailers and consumers.

**Alipay In The Future:**

Alipay has quickly amassed scalability across the globe with its active users growing by the millions in the last handful of years. Partly in doing so, Alipay has been known to foster partnerships with six European digital wallets to integrate their QR based payment processing.

Available in 10 countries within Europe between consumers and local merchants, this integration by Alipay shows how a Chinese conglomerate can have scalability in understated values that respect domestic markets and needs. All the while, Chinese users are not excluded from these partnerships.

**It’s Just The Beginning:**

Market researcher, Euromonitor, predicted that the value of mobile commerce is set to increase by 250% over the next 5 years to $4.3 trillion. With the US and China accounting for three-quarters of this growth, the big three, including global processor Alipay is a smart integration into your business.

**Our Gateway And Your Business:**

Total Processing’s payment gateway accepts Alipay amongst 198 other payment options to fight against checkout friction and cart abandonment rates.

Card-not-present payments and cashless payments will account for more than 1/5th of payments by 2020 as a direct result of mobile commerce and mobile banking.

Furthermore, it is estimated that one-quarter of banking users will be banking with an alternative banking payment provider within the next two years.

Total Processing’s payment processing solutions, gateway and interactive CRM give you total control over incoming and outgoing transactions within your business.

With live insights and reporting analytics, see and engage with the progress of alternative payment methods alongside other standard forms of payments through our PCI compliant gateway; with 99.99% uptime and no start-up fees!

**Sources:**

https://www.adyen.com/payment-methods/alipay

https://www.crunchbase.com/organization/alipay-a757#section-overview

https://honestversion.com/epayment-market-to-witness-an-outstanding-growth-during-2019-2024-alipay-amazon-pay-apple-pay-tencent-google-pay-first-data-paypal-visa-mastercard/

https://thefinanser.com/2019/06/a-joke-that-is-coming-true.html/

https://www.dragonsocial.net/blog/what-is-alipay-wechat-pay-payments/#WhatAlipay

https://www.openbravo.com/blog/tag/alipay/

https://www.easystore.co/en-hk/blog/8687121667137328713/reach-more-customers-this-2018-with-alipay

https://www.icaew.com/-/media/corporate/files/technical/information-technology/technology/185-the-future-of-payments.ashx

https://www.ft.com/video/96d2ca77-3cb8-405b-a1a0-1fb7f4b4f979

https://www.firstdata.com/downloads/pdf/STARFraudeBookFINAL.pdf

https://www.cybersource.com/content/dam/cybersource/Alipay_Partner_DS.pdf