Open Alipay Account: FAQ
Here are some of the Alipay FAQ's that we get asked. Scroll down to read how Alipay benefits sectors such as Tourism, Education, Exporters and service providers
WE ARE A FOREIGN ENTERPRISE WITH NO OFFICE IN CHINA. CAN WE APPLY FOR ALIPAY?
For vast majority of clients the answer is "Yes sure."As long as you have a) a website with a shopping cart, b) a registered business and c) a bank account then Yes, you can apply for Alipay. There is no-need to have a Chinese registered business or local mainland partner. If your business and bank account is outside of China Alipay acts as escrow and performs the FX conversion service then settles into your nominated official bank account.
HOW MUCH DOES ALIPAY COST?
As we are global licesned agents we provide all handling and processing for international accounts for free. The unique client Alipay API system integration and tech support costs vary according to customers web site and shopping cart. Installation fee may range from free to $50,000+ depending on size and complexity of client website. We will advise clients on requirements and any potential costs ahead of install. Alipay also charges a small fee per transaction and we can supply "best global rates."
ANY RESTRICTIONS WITH ALIPAY ACCOUNTS?Yes. Alipay is bound by China regulatory commercial and fiscal trading laws. No-one can open a client or merchant account without proof of identity and proof of IP (business ownership). Alipay also forbids any "credit" transactions which prevents charge backs or fraudulent transactions. There are also some extra restrictions and a list of "banned" businesses to prevent international fraud and/or money laundering, gambling, or trade in banned services or products such as weapons, drugs, pornography, stocks, real-estate or property transactions, endangered wildlife, and other banned products or services.
CAN YOU INSTALL ALIPAY ON OUR WEBSITE?
Since 2014 China Sales Co. are global licensed System installers ("Alipay SIs) for Alipay. We provide accounts and installation to foreign ecommerce clients.
WILL MY WEBSITE WORK WITH AN ALIPAY ACCOUNT?
Please note that today not-all web site platforms and shopping cart can currently support or can be integrated with Alipay. For example we are regularly contacted by clients that are on "monthly web support suites" type platforms with locked-in shopping cart systems that are surprised to find their platform can not currently accept Alipay. The easiest and best solution around this is to build a separate URL/ mirror site hosted in Hong Kong and/or China with shopping cart specifically for the China market.
For building a specific website that will have Alipay we use and recommend Magento, Word Press or Joomla all are good options. Ask China Sales Co. if your website is Alipay compatible and our expert licensed Alipay system installers will be able to assist.
HOW DO I APPLY FOR AN ALIPAY ACCOUNT?
China Sales Co are global licensed providers and System Integrators of Alipay Online Payment System.
COMPLETE THIS FORM to request Alipay application forms. *see below for list of supporting documents required.
Alipay accounts are free for approved merchants.
Approval process can take up to 2 weeks. Once approved, then merchant is issued with unique merchant Alipay code or "AP" that your webmaster or China Sales Co. Alipay licensed System Integrator's then inserts and tests on your web site.
Once tested and live, Merchant can then begin receiving funds. The whole process takes 3-4 weeks from submission of completed forms.
Alipay Application process:
A) approvals require all original documents and contracts must be in English.
- 1 x Alipay Merchant application form *contact China Sales Co for the form
- 2 x completed application agreement contract (signed and scanned copies)
- 1 x a signed colour copy of your official proof of business registration
B) Official licensed Alipay SI will check and confirm documents and also sign.
C) Original documents are then reviewed by Alipay, credit checks and business checks are completed.
D) After 2 weeks (approx.) approved * merchant will receive a unique secure code "Alipay API" that must be attached to their website.
E) Code (Alipay API) is then inserted and tested (by China Sales Co. technical team).
Merchant can then begin to receive Alipay credits.
IS ALIPAY LIKE PAYPAL?
Yes and no.
INTERNET BASEDWith both being card free and cashless transactions for a trade to occur with Alipay or Paypal it requires both the buyer and seller (user) to have accounts and both require the internet to conduct transactions. A key difference is that Paypal uses the internet to assist the wire of funds between user-bank accounts (credit moves from Bank account A to Bank account B) whereas Alipay works inside it's own secured system which qualifies and then moves funds between user-Alipay accounts (credit moves from Alipay account A to Alipay account B). This system is how Alipay can offer zero bank handling or bank transfer fees because thee are no banks involved, and therefore no bank fees.
O2O?Paypal is working on an O2O system (yet to be released) whereas Alipay also has built in many other functions including mobile wallet/touch pay at kiosks, ticket booths and retail shops in China and Hong Kong.
CREDIT/ OR/ NO CREDIT ALLOWED
Paypal will allow credit-card-funded transactions whereas Alipay only allows transactions that have sufficient cash-funds in their Alipay account. This means there are "almost zero chance" of credit charge backs or any fraud claims via the Alipay system.
Both provide free accounts for users. Both allow peer to peer transactions and both charge fees for transactions. A key difference is Paypal also charges for foreign / cross border exchange fees whereas Alipay only charges a transaction fee.
POPULARITY IN CHINA
The Chinese user rate is also markedly different. Because it is a foreign system to Chinese and also PayPal is "not well known" and has very small user rate in China. In fact less than 2% of China online transactions are done using any foreign credit cards or online payment systems, and that includes Amex, Mastercard, Visa and Paypal combined. Whereas it is estimated at January 2016 Alipay has 900 million accounts in mainland China and handled and estimated 48% of all 3rd party online transactions in 2014!
ANY ON-GOING FEES?
Alipay was the 1st, and still currently the only Chinese e-commerce payment system allowed to accept, then convert RMB into 14 different major global currencies including $USD/JpYen/ Euro/UK Stirling/ Swiss Francs/Australian Dollars and more. Alipay does not-charge currency FX conversion fees, so from our view "it is cheaper than using regular banks.” Also Alipay fixes settlements on FX rate on day and time of transaction. (Not on the FX rate on the time of settlement).
Alipay does charge a small fixed fee per transaction. The monthly fee is a sliding scale depends on transaction volume per month with most clients averaging 1.8%.
Alipay has a minimum settlement limit for cross-border purchases, currently USD $5,000 (or equivalent) must be received into Merchant Alipay account before amount is wired into the merchant’s account.
INTRODUCTION TO ALIPAY
Alipay was started and is part of the Alibaba group, China’s number 1 e-commerce company.
Alipay is a online debit system, whereby users must pre-pay RMB (Chinese Yuan) credits into their Alipay accounts then they can spend these credits with merchants whom have Alipay accounts. Users can top up via bank account, or by even purchasing credits in cash from an Alipay credit vendor.Particularly importantly for tourism is the mobile wallet functionality. Alipay allows Chinese tourists to pay for goods and services whilst travelling overseas by using their mobile phone, and, they avoid having to pre-purchase local currency at exorbitant rates. Alipay's mobile-wallet App enables instant cash-less transactions and in real time via secure online to offline or "O2O" e-commerce transactions linked to your e-store or business bank account. For example in China today it is "quite normal today" to use your phone and Alipay to buy a drink from a vending machine, or to pay for a taxi-ride, to pay utility bills, buy a movie ticket or pay online for a dress in a off-line retail store. These are just some good examples of how mobile wallet is changing the way people prefer to buy products and services today.
HOW MANY PEOPLE ARE USING ALIPAY?
As of December 2015 there were 900 million registered user accounts.
Alipay is the number 1 online payment system for China. Alipay accounted for approximately 48% of all Chinese RMB online transactions in 2013. *Approx. USD $760 Billion was handled via the Alipay system in 2013.
For some perspective, all-other major foreign transaction players including Visa, MasterCard, Amex, Secure Pay and Pay Pal combined all accounted for less than 2% of all online transactions in China.
WHY DO CHINESE PREFER ALIPAY?
For users Alipay is “safer, faster, cheaper and better” than using credit card or cash/ bank wire transactions. We think that if a Chinese tourist is given option of payment via Credit Card, or Alipay, or cash (e.g.: dollars) then they will prefer to use their mobile wallet and pay using Alipay. This allows them to save on transaction fees, plus, gives buyers convenience of using RMB currency to make purchases overseas and via their mobile device. Alipay is safe, fast, and secure.
- Users can easily pay merchants just by via their mobile phones, no need for use of card/s or cash.
- For “buyers” Alipay has a USD $10,000 per transaction limit, and a USD $200,000 annual user limit.
- For purchasing items over USD$10,000 just requires multiple transactions.
- There are no-limits for merchants on settlement amounts received.
However, as Alipay absorbs currency exchange, Alipay requires merchants to first receive a minimum settlement amount of $USD 5,000 (or equivalent value) before wiring to the merchant.
- If the transaction value is over-the minimum settlement amount (example: transaction = USD$5,100) then Alipay will instantly wire settlement amount/s.
- Merchant does-not require Chinese language pages on their website or sales materials.
Any merchant that has a) a website with a connected email address, and b) a bank account can apply for Alipay.
Alipay has the right to refuse merchant accounts if the business is deemed “not-preferred.”
- Examples of welcome-business are: online shops, travel and tourism destinations and related services (hotels, rental companies), educational institutions,exporters, cosmetics and health related products.
- Examples of banned trading items includes: weapons, pornography, gambling credits, drugs or prescription medicines and financial products.
HOW DOES ALIPAY WORK OFFLINE?
With a free wi-fi all these purchasing steps can easily be done off line, in-store, at the bar or even from a billboard.
- Account holder must 1sthave a “send” Alipay account with credits, and merchant must have a “receiving” Alipay account. *Currently 800 million account holders.
- Account holder chooses to make a purchase from the merchant then via web or QR code (mobile wallet) goes to the merchant’s Alipay account, and enters the amount they wish to transfer.Account holder then orders purchase from Alipay credits via entering secure pin.
- Credits are then instantly paid into Merchant Alipay account.
- If Merchant is offshore, then Alipay will immediately convert RMB purchase into local merchant ‘s preferred currency (14 options).
- Alipay converts at commercial (not retail) flash-market –currency rates, and does not add currency exchange fees.
EXAMPLE OF O2O (ONLINE TO OFFLINE) IN-RETAIL-STORE ALIPAYMENT PURCHASE:
- Chinese buyer travelling overseas wants to make a purchase inside a shop.
- Decides what product to purchase.
- Shop assistant directs buyer to Merchant’s own Alipay account (can be via QR code) on desk/ visible in store.
- Buyer then using their mobile phone logs into Alipay account and enters the required amount, then presses “send amount”.
- Merchant than instantly see credits moved into merchant account.
- Shop assistant verifies receipt (can be via printed email, or checking receipt and payment reference with buyer).
- Merchant then hands over purchase as credits have been received.