Alipay ventures into cross-border payment
Alipay announced on December 1 the launch of its “Overseas Transport Card” service through which users can use Alipay Wallet abroad to buy local transport passes directly.
Alipay announced on December 1 the launch of its “Overseas Transport Card” service through which users can use Alipay Wallet abroad to buy local transport passes directly. The service is available now in Singapore, Thailand and Macau.
Explaining the rationale for the service, the international operations director of the brand's holding company Ant Financial Yijie Peng said: “Outbound tourism is no longer a luxury but a part of the modern lifestyle. Cross-border payment shouldn’t be limited by national boundaries in an age of advanced technology, sophisticated transportation and rapid information flow.”
The service was introduced as competitor Baidu also launched its first O2O service in the overseas market, announcing a joint project with the Korea Tourism Organization involving its Zhida Hao, Baidu Data and Baidu Sticker services.
Industry observers say that cross-border O2O will become a new frontier to explore as the major players have already staked their positions in the domestic O2O market.
Currently, Alipay’s main international operations include Haitao, Aliexpress and cross-border O2O remittance services. As Aliexpress’s growth is slowing this year, Alipay shifts the focus to Chinese tourists' overseas travel spending by building a cross-border mobile service system supporting payments for duty-free shopping, air tickets, hotel booking, international remittance and transportation card services.
In 2013 China’s outbound tourism grew 18% to top 98.19 million trips while outbound travel expenditure increased 26.8% to total US$128.7 billion. It is projected that the number of overseas travelers this year will exceed 100 million, with the ratio of independent travelers continuing to increase, according to the China Tourism Institute.
Experienced O2O observer Yuanpu Huang believes that as the key of O2O lies in building a link between people and offline services, companies be they Baidu or Alipay must create a mobile service ecology from interface to payment. "In this stage they are just warming up for the race and the market has vast potential and room for growth,” he said.
However another observer from a third-party payment company thinks that the ultimate goal of Alipay is not only to make payment more convenient for users but also to mold their spending habits and foster the development of cross-border payment. "With its large user base, Alipay has immense clout to leverage in its partnerships with overseas organizations and suppliers. However, the greatest test ahead is how to break through the barriers of regulations and government monitoring of cross-border payment," the observer said.(Translation by David)