Alipay Rolls Credit for Consumers

Eyeing the growing credit market in China, Alipay has begun offering short-term loan service to Chinese customers shopping on

The short term loan service allows customers to spend about $4,800 or RMB 30,000 in credit is being powered by Ant Financial, which is Alipay’s parent company supporting the financial division of Alibaba.

The loan service has been approved for use on Alibaba’s flagship websites Tmall and Taobao. The service allows users to pay back until 10 days from the date of delivery.

Starting in 2008, Alibaba’s Tmall began offering business-to-consumer retail services. The website lets international and Chinese companies sell branded items directly to consumers in China and neighboring territories.

Likewise, Taobao facilitates consumer-to-consumer e-commerce, which also lets small companies provide to consumers in the region. The website works on similar lines as Amazon and eBay.

The credit service is currently in a testing phase to understand the evolving credit habits of Chinese consumers. Traditionally, Chinese consumers have been known to rely more on cash-based payment methods and less on credit, but the current market trend has seen a fast paced growth in the rise of credit companies in China.

Currently, more than a million online retailers are supporting the credit scheme, according to Ant Financial.

Alibaba’s Founder and Executive Chairman Jack Ma said the company’s finance wing Alipay that has close to 300 million users and controls about 50 percent of online payment services in China soon plans to go public.

Once Alipay goes public, Alibaba would hold about 33 percent stake in the company, according to Alipay was recently valued at $70 billion by Pacific Crest Securities.

In the past few years, Alipay has expanded its business from big cities to small towns and rural areas with about 54 percent of its transactions originating from mobile devices.


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