Sunday, March 25, 2012

Alipay ventures into logistics, PayPal looks to China

News this week: Alibaba Group’s e-payment subsidiary, Alipay, announced plans to invest US$79 million to diversify its business into the China logistics market over the next three years.

The investment will see Alipay unveil handheld devices that can be used to track parcels and accept payments for goods purchased online. The portable devices target China’s collect-on-delivery (COD) market, which according to Alipay, is the preferred method of payment for 70% of all online purchases made on China’s B2C sites, excluding those on the Alibaba Group’s Tmall.

An Alipay spokesperson stated the new service will only cater to offline payment for online purchases. The small processing fee charged to consumers will be split by Alipay (20%), banks (70%) and UnionPay (10%) – China’s bankcard association processing inter-bank transactions.

In a separate story, U.S.-based e-payment company PayPal is looking to expand its business into China. The company is currently awaiting the approval of its license application from the People’s Bank of China. PayPal, a subsidiary of eBay, submitted an application to operate in China’s domestic payments market at the end of last year.

PayPal also offers PayPal Here, a device for Apple’s iPhone that can swipe credit cards and scan checks in the U.S., Canada, Australia and Hong Kong.

Currently, no overseas companies have been awarded a permit to process domestic payments within China.

This post is excerpted from BSG's weekly e-newsletter which is part of our subscription research service, BSG Tracker. Visit our website to find out more about this service. You can also follow us on Twitter for all the latest updates.

No comments: