My Alipay, My Way

Alipay uses mobile payment services to enter the wireless Internet market. The Alipay business started with Taobao’s mobile version and gradually became China’s largest wireless payment platform. Alipay provides convenient and free services to Chinese people worldwide, which has positively impacted China’s financial industry and people’s lifestyles.


The first part of this article will study how Alipay has a transformative impact on people’s lives. The second part will consider the development of history and regulatory authorities. The third and fourth parts will study Alipay’s business model and Internet use and understanding. Finally, Alipay will be researching the transformation of the Internet.

How to pay the money offline through Alipay

Image:Carine Low,All rights reserved



What is Alipay?

Since China has established a firewall on the Internet, the Chinese Internet is equivalent to the entire Internet market’s epitome. People in China cannot use foreign software such as Instagram and Google, so Chinese Internet companies need to produce similar software to meet people’s demand for the Internet. (Aveni & Roest, 2017) Alibaba, Tencent, and Baidu represent China’s electronic Internet market. Alipay, which is studied in this paper, is a subsidiary of Alibaba. Alipay was born in 2003. In the beginning, it was only part of Taobao. It was used to help buyers and sellers build trust.


Now Alipay is China’s leading independent third-party payment platform, dedicated to providing “simple, safe and fast” online payment solutions for China’s e-commerce. Alipay is a credit guarantee platform. This platform was established for the imperfect credit system of China at that time. It effectively solved the payment bottleneck and credit bottleneck of e-commerce development and effectively promoted the development of e-commerce in China.

                                                                                    Taobao’s workmate-  Alipay

Image: Shumin Liao, Zuwei Xu, All rights reserved


The historical beginnings of Alipay

Digital platforms have unwittingly infiltrated our daily lives. Complete digital platforms are also gradually changing the lifestyle of a generation. Alibaba’s primary business is concentrated on Tmall, Taobao, and Alipay. They are all connected and mutually supportive companies. The establishment of Alipay is closely related to Taobao. In 2003, Alibaba launched Taobao. Nevertheless, in China, which was new to the Internet, people still had doubts about the Internet. (Werker, 2017,p16) At this time, Alibaba launched Alipay, a credit guarantee platform to help Taobao shopping. With Alipay as the credit intermediary, the buyer will send the money to Alipay to purchase goods and has not been saved yet. When the buyer receives the goods and confirms that the goods are qualified, Alipay will send the money to the seller. Alipay serves as a value-added service to save deposits for both buyers and sellers.


In 2004, Alibaba announced Alipay’s establishment, but now Alipay is not only an electronic wallet but also a daily necessity for people. With Alipay’s gradual reform and development, it became the largest mobile payment provider in the world in 2013. (Heggestuen, 2014) Alibaba set up the Alipay financial department alone, named ant gold suit, which used to manage Alipay and other financial software’s financial functions. With China’s Internet market transformation, Alipay has also perfected its functions and opened up different marketing.


In 2016, Alipay even launched public welfare activities such as Ant Forest and Ant Manor. In recent centuries, with the rapid rise of industrial technology, environmental protection has become a hot topic. Alipay launched Ant Forest to allow many people to participate in public welfare activities and participate in environmental protection. Alipay promotes users to walk instead of driving, pay for water, electricity, and coal online, online ticket purchase and other activities to save carbon emissions, will be calculated as virtual “green energy,” or online shopping is also used to promote the use of Alipay in the society. The user can obtain virtual energy on the phone through this behaviour and choose different trees according to the amount of energy obtained. (Ye, Shen & Yang, 2019) After the virtual tree grew, Alipay forest ants and charitable partners will be somewhere in the corresponding region of China to grow a real tree, or the protection of protected areas, in order to nurture and encourage users to low-carbon environmental protection. With the active participation of users, a number of users Ant Forest has grown to 500 million. The end of April 2019, Alipay and public organizations have planted over 100 million trees in arid regions of China. (CHOU, 2019)

Environmental changes brought by the ant forest(Before VS After)

Image: Christine Chou, All rights reserved

This is a video that shows people how to plant a tree through Alipay. (Alipay, 2020)

Alipay has changed people’s lives in travel and shopping through a series of exciting charity activities. Alipay also contributes to the environment in China, which is also a major difference between it and other payment wallets. Alipay is not only profitable, but also thinking about how to protect the environment, people survival.


Behind Alipay’s revolutionary business model

The profit model of Alipay is different from other companies. The business model of Alipay is divided into four aspects. First, when consumers use Alipay to shop online on Taobao or other websites, Alipay receives the user’s money in real-time. However, Alipay’s payment to the online store is settled weekly or monthly so that Alipay can use the user’s money first to make investments. Second, the current third-party payment platforms in society need to first sign an agreement with the bank to determine the fee rate to be paid to the bank. Then Alipay charges customers further fees based on the handling fee rate plus its gross profit (service commission). Third, Alipay also charges specific advertising fees by placing advertisements on the platform. Finally, Alipay also uses other financial value-added services, such as air tickets and movie tickets. (Jia, 2016)


Alipay’s internet ecology

In recent years, more and more payment software has been put into people’s lives, such as Wechat payment, Paypal, and UnionPay. If a payment method wants to establish a large user group, it must first establish its Internet ecosystem. (“The internet ecology”, 2003) The above examples all have corresponding Internet ecosystems, but Alipay’s Internet ecosystem is relatively complete. From the very beginning when it was developed to cooperate with Taobao’s operation, it can be seen that Alibaba wants to build an ecosystem because the Internet is becoming more and more perfect. The Internet model is getting closer to the offline market, which is more like a modern virtual market. There are businesses, customers, shopping malls, banks. The emergence of Alipay happened to act as a virtual bank. Its simple operation directly broke the monopoly of online banking and UnionPay and successfully pushed out the Internet payment business.


Nevertheless, the market positioning of Alipay is not only a simple payment platform; they also want to create a financial market that can monopolize the entire Internet. By launching an online public utility payment system, Alipay has attracted customers extensively by paying water, electricity, gas, communications, and other fees without leaving the house. Afterwards, it also proposed the Alipay wallet business, which can be described as the first “virtual bank in the Internet market.” It is exactly the same as the offline bank model, and realizes the docking with the offline bank, supporting functions such as online transfer, deposit and withdrawal, cash withdrawal, and payment. But this is only a small circle of Internet finance. The real realization of the ecology is the emergence of Alipay’s circle of friends. Merchants with frequent business contacts can be directly added as friends, realizing the function of direct conversation and chat, and can even be set without verification Instant transfers. According to the newspaper, the number of Alipay’s real-name users at the end of 2013 was close to 300 million. By November 2013, payments made through Alipay’s mobile application reached 12 million transactions. By the beginning of 2014, this number had risen to 18 million. This is the best performance of global mobile payment service providers. Since the second quarter of 2013, Alipay has surpassed Paypal to become the world’s largest mobile payment company. The Chinese company currently has 240 million fast payment users and more than 100 million mobile payment users. (Xinhua Economic News, 2014)


The construction of the Internet financial ecosystem is unstoppable. In the future, payment software will certainly not be limited to payment services. Each payment software may be a complete Internet shopping mall. Consumers can directly complete their shopping needs on payment software.

Below is a diagram of Airbnb’s internet ecology:



Alipay regulatory authorities

At the same time, users of Alipay’s trust issues can also rest assured that China has created an online payment clearing platform for non-bank payment institutions to monitor and manage the flow of funds of third-party payment platforms such as Alipay. (Xu, 2017) The online payment clearing platform of non-bank payment institutions is only a clearing platform and does not directly carry out payment services in order to maintain neutrality. The establishment of the platform, to a certain extent, you can correct the inter-bank payment processors illegal settlement business, changes in payment problems between institutions and banks long connection. In other words, the third-party payment channels, online payment institutions are not required, can no longer connect directly through the online version of the platform and UnionPay bank, but to connect directly with banks. This can also prevent third-party payment platforms from performing illegal operations online.


Alipay Internet transformation

At the Alipay Partner Conference, Ant Financial’s CEO Hu Xiaoming mentioned :“Today, financial technology must transform from pure financial payment to digital life service. ” (Hinchliffe, 2020) At the same time, Alipay announced a comprehensive upgrade to an open platform for digital life. In the next three years, it will work with 50,000 service providers to help 40 million offline merchants achieve digital upgrades through open platform strategy and digital business empowerment.


Simultaneously Alipay’s slogan will also change from “Pay with Alipay” to “Life is good, Alipay“.


In the latest version of the Alipay application, many new services have been added to the homepage, including food delivery, food/entertainment, hotel accommodation, etc. Hu Xiaoming said that 80% of China’s service industry has not yet been digitized. Upgrading Alipay to an open digital life platform will create a “new infrastructure” for the digitization of the service industry and promote accelerated changes in the offline service industry. (Hinchliffe, 2020)At the press conference, Alipay also announced the launch of the “China Small Store 2020 Plan“: increasing the loan availability rate of small stores by 20% and helping small stores increase their income by 20% on average. At present, Ant Financial is promoting the “310” inclusive credit model, that is, by tapping a point on the mobile phone within 3 minutes, you can obtain the loan information required for input. Evaluate the risk control data model within 1 second, and give the credit limit and no one is involved, purely artificial mode. (Wire, inner diameter)


Alipay app will also launch new features. Click 1 like on the payment result interface to help the boss obtain an interest-free loan of 100 yuan. In the future, 100 million consumers will be mobilized to like 20 million merchants, and 10 billion “contactless loans” will be given out interest-free quotas. At the same time, the face-scan payment developed by Alipay has gradually been applied to people’s lives, breaking the traditional scan-code payment. (PR Newswire, 2019)

Consumers pay with facial recognition

Image:Alipay via Weibo

In general, Alipay is a special case of payment software because it has its  Internet economic circle. Alipay has also redefined the payment platform, not only online payment, but also to help customers get convenience such as online payment, online shopping, etc. Alipay has also replaced cash and bank cards through promotion to change the lifestyle of the new generation.



Reference list


Alipay. (2020). How Alipay Ant Forest makes going green fun [Video]. Retrieved from


Aveni, T., & Roest, J. (2017). China’s Alipay and WeChat Pay: Reaching Rural Users. Washington: Research Papers in Economics. Retrieved from


CHOU, C. (2019). How Alipay Users Planted 100M Trees in China | Retrieved 18 November 2020, from


Xinhua Economic News. (2014). Alipay verified real-name users approach 300 mln by end-2013. Retrieved from


Heggestuen, J. (2014). Alipay Overtakes PayPal As The Largest Mobile Payments Platform In The World. Retrieved 17 November 2020, from


Hinchliffe, R. (2020). Alipay plans digitisation for 40 million Chinese service providers – FinTech Futures. Retrieved 20 November 2020, from


Low, C. (2019). With WeChat Pay and Alipay now accessible to foreigners, how will this benefit brands?. Retrieved 20 November 2020, from


Jia, M. (2016). Analyzing the Chinese online-to-offline business dynamics, case: Alibaba Group’s Alipay (Master). Aalto University School of Business.


PR Newswire. (2019). Sunmi enables digital transformation for merchants with Alipay face recognition-based payment technology. Retrieved from,contains,Alipay%20Transformation


The internet ecology. (2003). IEEE Spectrum, (10.1109/MSPEC.2003.1191786), 68. Retrieved from


Werker, M. (2017). The role of Alipay in commerce in China (Master). University of Leiden.


WIRE, B. MYbank Works With Financial Institution Partners to Serve Over 15 Million SMEs. Retrieved 20 November 2020, from


Xu, Y. (2017). China to Process All Online Payments via Centralized Clearing Platform From June 2018. Retrieved 20 November 2020, from


Ye, S., Shen, X., & Yang, L. (2019). Motivation to participate in Ant Forest (Master). Uppsala University.