What is Alipay?

Alipay is one of the most popular payment platforms in China – where it has over 660 million monthly active users – and it’s increasingly used internationally. The mobile payment app is owned by Ant Group (an affiliate company of the Alibaba Group, which owns Aliexpress). Merchants can access cross-border payments through its related product Alipay+.

Alipay allows users to pay for online and offline purchases, make account-to-account transfers, hold a balance on the app itself, and pay bills. It supports multiple payment methods such as credit cards, debit cards, and bank transfers via its digital wallet. 

In addition to its payment services, Alipay also offers other financial services, such as wealth management, insurance, investments, and the ability to earn interest on your Alipay funds. It does so many things it’s considered a “superapp”.

This article will tell you everything you need to know about Alipay and Alipay+ payments.

How does Alipay work?

Alipay is a standalone payment method and digital wallet. So users can link bank accounts, credit cards, and other payment methods to their Alipay account. 

Alipay users can choose to make payments using a QR code, either instore or online using the mobile app. At a physical location, either the merchant scans the user’s QR code, or the user scans the merchant’s QR code to make a payment. Online, the user can pay on a website or app via redirect to the Alipay app, or by scanning a QR code on a computer screen using their phone.

The payment process is fast, secure, and convenient. Alipay is available in multiple languages and currencies, expanding the user base beyond its birthplace, China.

Funds held in escrow

Alipay's payment system operates on the principle of escrow, which means that funds are held until both parties have confirmed the transaction. 

How long do fund transfers take?

In most cases, Alipay transactions are processed within seconds, and funds are usually available in your Alipay account immediately after the transaction is completed. 

It may take a day or two if the transaction is cross-border. If the transaction involves a refund or dispute, it can take longer to process. 

If you’re transferring funds from your Alipay account to a bank account, the processing time can take up to 1-3 business days, depending on the bank's processing times. 

What is Alipay+?

Alipay+ is a cross-border mobile payments platform. It’s best for merchants that want to take payments in multiple Asian countries as it connects several popular local payment methods under one platform. 

Like Alipay, it includes a range of payment methods such as auto debit, cashier payment, consumer-presented QR and merchant-presented QR. Alipay+ also includes marketing tools such as a rewards platform and the ability to offer discounts at checkout.

Where can you use Alipay+?

Checkout.com has launched seven local wallets under Alipay+. These are: Alipay Hong Kong, Alipay China, GCash (Philippines); Dana (Indonesia); Touch ‘n Go (Malaysia); Kakaopay (South Korea); Truemoney (Thailand). 

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That means, for example, merchants based in one country (such as the UK) can use Alipay+ to take payments from customers in any or all of the following countries: Hong Kong, China, The Philippines, Indonesia, Malaysia, South Korea, and Thailand.

Localized payment experiences with Alipay+

Alipay+ offers payment in local currency, according to the customer’s location. For example, a merchant based in Hong Kong would typically show pricing in HK dollars. But with Alipay+, a shopper in Thailand will see pricing and pay in their own currency, Thai Baht. The customer won’t pay a currency conversion fee, as this is billed to the merchant. 

Efficient international scaling

As a centralized payments platform, Alipay+ offers merchants operational advantages when expanding globally. Usually, a merchant would have to open a bank account in each market to take payments. 

However, going into APAC with Alipay+ and Checkout.com means the merchant can set up payment processing (including onboarding, technical integration, reporting, and entity rules) from one central partnership. This is modular, and the merchant can pick and choose which digital wallets they want to use. This represents significant savings in scoping and entity set-up costs.

Industries best suited to Alipay+

Due to its mobile compatibility, Alipay+ is best suited to the following lines of business:

• Digital services: gaming, (mobile, PC, console), content streaming, social media, app stores
• Ecommerce stores: retail, cosmetics, fashion
• Delivery: food delivery, logistics

As Alipay+ wallets support recurring payment, making it ideal for subscription-based products or services.

Which merchants cannot use Alipay+

‍Certain types of merchants are restricted from using Alipay+, due to its company policies. These are:

• Financial or currency-related services including crypto or virtual currencies. Money transfer, investment, insurance products or services. 
• Gambling or lottery services.
• Tobacco, electronic cigarettes, online tobacco 
• Adult products or services

For any merchant that uses Alipay+ the time to deliver (i.e. the time between the purchase and the delivery of the goods) must be less than 60 days. Therefore Alipay+ is not suitable for businesses that take payment well in advance of delivering the order, such as travel agents.

Is Alipay safe?

Alipay is considered a safe and secure payment platform. Here are some of its security features:

Advanced encryption and time-limited QR codes

Alipay uses advanced encryption technology to protect users' personal and financial information. All data transmitted between Alipay and its servers is encrypted using SSL (Secure Socket Layer) technology, which ensures that sensitive information is kept confidential. Additionally, the payment QR codes are dynamic, meaning they are generated to be effective in a specific context and for a limited duration.

Risk management system

Alipay’s risk management system analyzes user behavior and transaction patterns in real time to identify suspicious transactions and flag them for review. It assesses risk using factors such as device data, IP address, location, user habits, and seller account characteristics.

User controls and authentication

Payments via Alipay digital wallet are authenticated when the user enters a password or submits a biometric scan (such as fingerprint or face ID). Under Alipay guidelines, PSPs are obliged to offer users the option to turn off code-scanning payments. Both of these measures offer the user more control over their payment security. This can also help to reduce chargebacks, because you have evidence that the account owner authorized the payment using their device.

Benefits of using Alipay or Alipay+

There are many benefits of using Alipay, including:

Increasing checkout conversion

Customers favor local payment methods because they’re familiar and trusted. Without offering the right payment options to customers, you’ll struggle to scale. Our research found one in two merchants who failed to properly activate local payment methods in new markets saw significantly lower-than-expected sales.

Enhanced security

Alipay's risk management systems can help your business detect and prevent fraudulent activities, minimizing the risk of financial losses due to fraudulent payments. Stronger authentication can take place due to the payment going through a mobile app, which is protected by passcode or biometric security. 

Reaching more customers

Alipay is used widely by merchants across many different countries, allowing you to expand your customer base and increase revenue streams. For that reason, accepting payments via Alipay can help you compete in markets you otherwise wouldn’t be able to access.

Merchants should consider offering Alipay if they want to reach customers who already use it. For instance, a UK grocery delivery merchant may offer Alipay to serve Chinese customers living in the UK.

Start offering Alipay with Checkout.com

Enabling Alipay can significantly improve your acceptance rate, increase customer satisfaction, and boost revenue. If you want to improve checkout conversion, you should consider whether your customer base already uses Alipay and expects to see it as an option for your business.

Checkout.com is the first in the market to offer Alipay+ with the full range of Alipay+ wallets. That means we’re in a unique position to help you scale in new markets, and drive revenue.