AliPay, the online payment system which own by the e-commerce giant Alibaba, has now introduced a ‘e-wallet’ payment method to millions of China’s retail stores, allowing transactions between shops and their customers, who need only an app to be installed on their smartphones. The product, which called the Barcode Payment, is a face-to-face payment solution based on the use of bar-code scanners, which link mobile phones to merchants’ cash registers. Alipay is China’s most authority online payment provider, the new mobile payments solution will fully expand their business to traditional retail market…
Briefly, here’s how the AliPay Barcode Payment works: When transferring funds to a shop, any consumer with an Alipay account and an Internet-enabled phone equipped with the existing Alipay mobile payments app can generate a unique bar code containing account data on the phone’s screen. The merchant, using an ordinary visual scanner, captures the bar code by scanning the phone screen. The data is then transferred to the merchant’s computer system, the sale or fund transfer will be completed when the consumer verifies the purchase. The shop owner can connect to Alipay through Internet, to transfer the funds to any bank account instantly. Consumers with camera-equipped phones can also use the system to transfer funds to each other.
The end-users just need an iPhone, Android or Nokia phone with the AliPay app installed. The system offers greater convenience to Chinese consumers, and can be used with a variety of credit and debit cards that are bundled with the user’s Alipay account. Transactions are secured by password and standard Internet encryption protocols. If a phone is lost or stolen, a savvy thief could only use it to drain an Alipay account up to a maximum of RMB200 (US$30) transaction limit, a passcode will be required for a larger amount. Various technologies combining bar codes and mobile phones are being applied elsewhere for marketing, but the AliPay Barcode Payment looks like to be the first for mass-market mobile payments in China.
Alipay is going after millions of small shops and convenience stores that may not have the money to install terminals provided from the bank, but want to offer consumers the convenience of paying by mobile phone from their Alipay online accounts. The only investment needed is a simple bar-code scanner, which can cost only about US$30 in China, and even a scanner is not essential because micro-merchants can also complete the transactions over their own camera phones. There is no charge for the registration, and the first 20,000 yuan (about US$3,090) transactions will be free per month. When the amount exceeds 20,000 yuan, Alipay will charge the shops only a mere of 1% fee for completing transactions.
AliPay and Alibaba have been getting quite a bit of media attention recently, due to AliPay being controversially spun-off away from Yahoo hands to facilitate its getting a government-mandated online payments license. In the next few months time, we’ll see how stores and shoppers in China react to AliPay Barcode Payment. It the meantime, it is reported that Coca-cola will be the first to use this service in their retail channels.
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