Date
12 December 2017
In a recent promotion, shoppers were able to get a special discount for using Alipay to settle their bills. Over 300,000 merchants are said to have joined the campaign. Photo: Xinhua
In a recent promotion, shoppers were able to get a special discount for using Alipay to settle their bills. Over 300,000 merchants are said to have joined the campaign. Photo: Xinhua

Why Alipay is a formidable rival of credit card firms

Shoppers can now use Alipay in over 120 Walmart stores in China, and the process takes only about two seconds.

The US retail giant aims to make Alipay available in all its mainland outlets by the end of this year.

Walmart’s move is believed to be inspired by Carrefour, which saw its customer traffic jump 18 percent four months after it introduced the popular payment alternative, Hong Kong Economic Journal Monthly reports.

Alipay said out of the top 100 retailers in China, 58 are already using its payment platform. These include electrical appliance vendors, supermarkets, convenience stores, household product sellers and restaurant chains.

In addition to Walmart and Carrefour, global brands including McDonald, Ikea and Watsons are also on the list.

A fast growing number of mainland shoppers now prefer the smartphone-based payment method to cash or credit card.

Cheaper fees are also a big draw for merchants. UnionPay charges about 0.38 to 1.25 percent but Alipay reportedly costs as low as 0.6 percent.

Quite often, retailers do not accept UnionPay for sales under 20 yuan (US$3.9), but Alipay has no problem with small ticket transactions.

Similar mobile payment services like Tencent’s Weixin Payment are also gaining a lot of traction in China.

Both Alipay and Weixin look set to keep expanding their territory, probably at the expense of business of card operators like UnionPay and Visa.

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CG

EJ Insight writer

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