Alipay Launching ePass for US Retailers to Tap Chinese Consumers

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By Associated Press | Updated: 15 October 2014 17:39 IST
China's half billion online shoppers will soon have an easier way to shop in the U.S.

Alipay, the payments unit recently spun off from Chinese e-commerce powerhouse Alibaba, is launching a service for U.S. retailers called ePass. Alipay has already been working in beta mode with retailers such as luxury deal site Gilt.com, The Gap and H&M.

"We want to demystify the Chinese consumer for U.S. retailers," said Jingming Li, president and chief architect of Alipay, which has a U.S. base in Santa Clara, California, alongside its affiliate Alibaba.

Alipay targets English-reading young professionals in the four biggest regions of China (it doesn't offer a translation service).

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The move will let U.S. retailers tap into the estimated 500 million Chinese online shoppers who spent $298 billion online in 2013. ePass will be available to any U.S. retailer interested in reaching the Chinese consumer, Li said in a press briefing.

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And it comes as the payment-services category is heating up with new offerings including Apple Pay, and eBay's plan to split off its PayPal payments business next year.

Cross-border shopping is growing. PayPal, which also offers cross-border payment services, estimates that by 2018, there will be 130 million cross-border shoppers spending over $300 billion globally.

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It is possible for a Chinese customer to make purchases on U.S. retail sites without ePass, but the process involves using an international credit card and typically brings mark-ups on Western products. ePass aims to ease the "friction" of international purchases, Li said.

Users of ePass will see an ePass payment option when they check out on a retailer's site. Chinese shoppers pay in yuan using their Alipay account and Alipay transmits the payment to merchants in 14 currencies via 180 international financial institutions. Customs duties are calculated at checkout.

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Alibaba started Alipay in 2004 to facilitate payments on its web sites and spun off the unit in 2011 into a company controlled by Alibaba CEO Jack Ma. Because it was spun off, Alipay was not part of Alibaba's mammoth $25 billion IPO in September, the largest ever.

Alipay says ePass can provide retailers with payment processing services, as well as shipping logistics and marketing services as needed. Alipay will take a cut of each transaction but did not specify how much the percentage is.

 

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Further reading: ePass, Internet, Alibaba, Alipay
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