AliPay posed an official announcement on Sina Weibo today to shut down offline POS-based business, because China UnionPay released stringent regulations on third-party bank card payment services (report in Chinese).

AliPay launched this business in March last year with an ambitious plan to invest 500 million yuan ($81.15 million) in 3 years and to equip  third- and fourth-tier cities with overall 60,000 POS terminals.

Most of the online payment companies swarmed into offline payment sector, as 50% to 70% of the deals processed by B2C retailers are paid with cash on delivery (COD), according to research institute iResearch. Given the huge market potential, AliPay rolled out this service to solve the difficulties in syncing the delivery and payments data caused by COD. POS machine can update the real-time transaction data, saving the costs generated by order confirmation delays and improving the transaction efficiencies.

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Emma Lee

Emma Lee is Shanghai-based tech writer, covering startups and tech happenings in China and Asia in general. We are looking for stories related to tech and China. Reach her at lixin@technode.com.