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Looking back at ChinaBang: Alipay – Best application of the year 2013
TechNode has been organizing the annual “China Bang Awards” since 2011. Over the past few years, TechNode has witnessed a large number of emerging startups grow into unicorns. For the upcoming ChinaBang Awards 2018, TechNode has started a special report to review the history of China Bang Awardees.
In May 2003, Alibaba’s e-commerce platform Taobao went online. Alibaba received some calls on their hotline but had few transactions on Taobao. Most customers had never used an e-commerce platform before and weren’t willing to pay before they received the goods, nor ready to ship products before chitchat with customers. Founder of Alibaba, Jack Ma, was vexed by the mistrust on both sides of the deal.
Alipay was born in Davos. “When I was in Davos, I suddenly had an inspiration,” says Ma. He recalled that he was so excited and called one of his colleagues. “You go for it right now. If something goes wrong with the product that breaks the law, even leading to prison, then I will take the blame. ”
On October 18, 2003, Taobao launched Alipay, a third-party online payment platform. In the same way PayPal was being used with eBay in the West, Alipay solved the problem of e-commerce payments and ramped up the sales data exponentially. Five years later, with the rise of mobile devices, Alipay launched its mobile payment business.
In 2013, Technode gave the “ChinaBang’s Best Application Award of The Year” to Alipay. 2013 was a big year for the Alipay team. Alibaba’s payment platform also launched a money-market fund, namely Yu’e Bao. By the end of that year, Alipay’s mobile payment users exceeded 100 million, and meanwhile, Alipay’s wallet also announced that it would launch as an independent brand under Ant Financial, a newly-created subsidiary of Alibaba.
It has been another five years since ChinaBang gave the prize to Alipay. Over the past 15 years, Alipay has grown from a little spark to the world’s most valued payment platform. Hundreds of millions of Chinese use Alipay to manage money, pay bills, buy train tickets, order takeout, and transfer money. More and more people are showing off their year-end Alipay transaction records on social media. Hundreds of millions of people’s life, entertainment, public welfare, finance, consumption data are recorded by Alipay, forming the earliest credit records for Chinese people.
Alipay spokespeople said that mobile payment is not only a change of payment methods but also has a particular impact on the development of society. For example, Ant Financial provides mortgage, credit and other services to 795 poor counties. Mobile payments can lead to credit for users so that consumers can access credit, insurance, and other financial services. As of the end of 2017, Ant Financials’ Sesame Credit had accumulated 41.5 million “no-deposit” users—users who are trusted enough and have a high enough credit score to not pay deposits for offline services.
Search for wallets on e-commerce platforms declined for the first time in 2017, according to Alibaba data. Going out without cash is now becoming a habit of life.
On May 24, 2017, Alipay launched its first version of the app outside of mainland China. Alipay in Hong Kong (AlipayHK) officially started offering cashless services to Hong Kong residents. After AlipayHK went online, local residents can link their bank credit card or transfer money to their Alipay account, and make a direct payment with Hong Kong dollars.
In fact, Alipay launched its services in Hong Kong market as early as 2007, but it was not until August 2016 that the Hong Kong Monetary Authority issued a third-party payment license, making AlipayHK the first payment license holder to provide digital financial services to local users. After six months’ preparation, AlipayHK finally went online.
AlipayHK provides services including QR code payment and merchant offers. The QR code payment works precisely the same as the one on the mainland: show a payment QR code and let merchants scan the code to complete the payment. Beyond these functions, Alipay HK will gradually add services such as phone bills, utilities, peer transfer, taxis, and insurance so that local Hong Kong residents can genuinely enjoy a cashless life.
Alipay spent 15 years evolving from a potentially dangerous idea to national pride. After being named one of China’s new four inventions by State media, the team took on more expectations and tasks of national significance. Last June, Monaco signed a strategic partnership agreement (MOU) with Alipay, giving merchants the access to the payment platform. It is the first time that Ant Financial, Alibaba’s financial spinoff, signed a strategic partnership agreement with a sovereign government. Monaco will be the 12th European country to access Alipay.
It is bound to be a long journey for Alipay to move its mobile payments to the rest of the world. On January 2, 2018, Alipay released its 2017 national data report. The data shows that mobile payment users accounted for 82 percent of the nationwide 520 million Alipay users last year. There are over 11 provinces with more than 90 percent users of mobile payments. Guizhou and Shanxi rank first with 92 percent.
“The increase in the proportion of mobile payments is closely related to the coverage of Alipay’s use in different scenarios and the wide implementation of QR code,” said an Alipay spokesperson. In 2017, buses and subways in more than 30 cities across the country began supporting Alipay and more than 200 million citizens used more than 100 services in 12 categories, including social security, transportation, and civil affairs. Small merchants use QR code stickers to digitize their cash registers. Meanwhile, Alipay has accumulated access to tens of thousands of merchants in 36 overseas countries and regions, and its total number of mobile payments increased by 306 percent compared to 2016.
—Translated by Carol Peng