Stripe, arguably one of the fastest growing fintech startup that allows users to accept payments through several different payment service providers has recently announced its support for Alipay, China’s largest payment processor.
The two companies, Alibaba and Stripe entered into a strategic partnership in June 2014 and have been developing and testing Alipay on Stripe’s payment platform for well over a year. Today, Stripe merchants could sell to 500 million new customers, and will automatically detect Chinese buyers and enable them to pay on web and mobile using instant SMS authentication.
“We’ve been very clear with our signaling, talking about how important it is to us that we can enable buyers and sellers anywhere in the world. We’ve talked about how crazy it is that if you go and launch a site or build a mobile app, that you can’t sell frictionlessly to anyone anywhere in the world,” Stripe founder Patrick Collison announced in an interview.
The integration of Alipay onto Stripe’s existing payment platform will open up western merchants to the “lucrative” Chinese market. Currently, Alipay supports over 300 million users and processes 80 million transactions per day, establishing itself as the most popular e-payment platform in China. In fact, Alipay dominated China’s entire online payment market in Q2 of 2014, processing a staggering 79.9% of all online transactions in the country.
The growing popularity of Alipay remains a strong advantage for merchants using Stripe, as it allows Chinese buyers to purchase items simply with their phone number. China is known for its “independence”; the government does not allow the use of YouTube, Facebook, etc. because they have their own. From QQ to Baidu to Youku, the Chinese government has always offered its people with their own platform and has banned international systems and software like YouTube. Because of this “policy” the majority of the Chinese population currently use software and payment processors created and developed in the country, like Alipay.
Westerners in contrary, accept payments through global financial institutions like Paypal, which is used by a very small portion of the Chinese population.