What happened: On September 14, a source told an NBD News reporter, Alibaba’s online payment platform Alipay inked an agreement with China’s UnionPay. The two will cooperate on card-less and barcode payments, with Alipay offering some payment clearing services through UnionPay. The news follows a similar development this past April, in which UnionPay announced a QR code payment partnership with WeChat Pay. According to Wang Pengbo of internet consultancy Analysys, Alipay’s partnership with a payment clearing organization was inevitable and also forms part of a nationwide trend.
Why it’s important: Since last year China’s government has been intent on regulating online payments, even setting up a new clearinghouse to act as an intermediary between third-party payment platforms and banks. In order to abide by regulations, both of the country’s major online payment platforms have now inked agreements with UnionPay, which will most likely benefit the official payment network. Changes to China’s online transaction ecosystem are still underway, however, with the possible side effect of constricting businesses.