WeChat was developed by Tencent, which is the creator of QQ, one of the major IM messengers in China and the main competitor of Microsoft’s MSN messenger in the desktop era.
In fact, WeChat and WhatsApp, together with LINE and Kakao in Japan and Korea, were all inspired by Kik Messenger. WeChat Pay is the payment function of WeChat, which is widely seen as the WhatsApp of China. It turned out to be a milestone for Alipay, as it was the first step to expand beyond payment service and to become a full-fledged financial services company: Ant Financial.Īccording to press report, Alipay currently has more than 600 million registered users, of which about 300 million are MAU and 80 million are DAU. With interest rate higher than bank accounts deposit rate, more and more shoppers were attracted to use the Yu’EBao service as a virtual wallet. As a result, so much cash was sitting in Alipay’s deposit pool that it figured out a way to benefit the shoppers and to further enhance user stickiness, by providing Yu’EBao service, a money market fund for shoppers’ deposits in their Alipay accounts. For its convenience and reliability, Alipay has also caught on the rising momentum of mobile commerce and became the dominant payment method. Successfully solving the trust issue, Alipay saw tremendous growth on Taobao plaform, and even started to be used on other platforms outside of the Alibaba ecosystem.Īlong the way, Alipay put a lot of emphasis on improving payment authorization rate in order to guarantee the best user experience. So Taobao introduced Alipay as a 3rd party to temporarily hold the money paid by the buyer, and would not release the money to the seller until the buyer confirms that the product was received and in good condition. Back then, many conversations between sellers and buyers on Taobao failed to result in a transaction, often times because both sides suspected each other as fraudsters. To enhance its competitive advantage, Taobao tried to solve the biggest pain point in ecommerce in China at that point - the trust between seller and buyer. It was right after eBay acquired in China, and Taobao saw this acquisition as a major threat for its marketplace business. So I decided to write a piece about Alipay and WeChat Pay about their history, how they shaped the ecommerce and payment industries in China, and their growing impact outside of China.(Disclaimer: all views are my own, not related to my employer.)īorn in 2004, Alipay was first created as the payment department of Taobao, the B2C platform of Alibaba Group. Recently I have been getting a lot of questions from my American and European friends and colleagues about what Alipay and WeChat Pay do and what impact they have made on the payment industry, as increasingly more businesses start to realize their importance thanks to their media traction lately. Everything You Need to Know about Alipay and WeChat Pay
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