ALIPAY, China’s giant mobile payment provider, has its eyes trained on Singapore with plans to offer its payment platform soon to users here.
For a start, the subsidiary of Alibaba’s financial arm is expanding its operations in Singapore by targeting tourists from China, Chinese citizens living here, as well as others with a China banking account.
Currently, Alipay users need to have a China banking account for debiting transactions or a China bank-issued credit card.
On Tuesday, it signed a deal with CCPay, owned by local startup CC Financial Services Pte Ltd, to increase the number of Alipay acceptance points here in addition to the 20,000 points it already has – of which about 17,000 of them are for taxis.
The firm, which is a unit of Alibaba’s Ant Financial, said it would open its payment platform to Singapore banking users “soon”, although its country manager for Singapore, Sri Lanka and Maldives Melvin Ooi declined to give a timeline.
Alipay had, in July this year, outfitted all ComfortDelgro taxis with Alipay acceptance points, and had also tied up with Prime Taxi in March to offer Alipay on their taxis.
The remaining 3,000 acceptance points are in brick-and-mortar shops in tourist-heavy areas such as Chinatown, Sentosa, and Orchard Road. CCPay will begin by rolling out Alipay acceptance points in People’s Park Complex and Chinatown from this Friday, and plans to take these to areas like Bugis, Geylang, and even to heartland areas like Clementi.
According to the Singapore Tourism Board, tourists from China represent Singapore’s second largest source market. In 2016, there were 2.86 million visitors from China. The proliferation of Alipay acceptance points in Singapore would encourage greater spending from Chinese tourists, said Mr Ooi, as this initiative would give them access to a payment method that they are familiar with.
As Alipay supports the settlement of 18 currencies including the Singapore dollar, transactions made here can be done in Singapore’s local currency. Businesses do not need to register for an Alipay account to use the service as CCPay would handle all Alipay transactions done here, said CC Financial Services founder and director Jed Huang.
When a local business carries out a transaction in Singapore dollars, the customer from China would have the billable amount – converted to renminbi – deducted from his Alipay account. Alipay would then send the deducted amount in Singdollars to CCPay which will then ensure that the Singapore merchant receives the money in Singdollars.
This way, Mr Huang told The Business Times, Singapore merchants would not have to worry about fluctuations in foreign exchange markets directly affecting day-to-day revenues. Instead, it is the China customer who will bear the cost of the cross-currency expenditure in this regard, he said.
“However, there may still be some transaction or admin costs.”
Discussing the business model behind the partnership, Mr Huang explained that CCPay would first take a cut of every transaction made with Alipay, and Alipay would then take a portion of CCPay’s earlier cut.
However, he said this does not mean significantly higher costs for businesses as CCPay offers highly competitive rates. Mr Ooi also emphasised this point, adding that the transaction fees that businesses would have to pay would start from zero per cent, but did not disclose further details regarding the costs that would be borne by businesses using the Alipay service here.
When asked about the reasons behind Alipay choosing to partner with CCPay – given that Alipay had previously worked directly with local companies ComfortDelgro and Prime Taxi without an intermediary – Mr Ooi said that a local partner in the form of CCPay would allow them to be more sensitive to the conditions on the ground, and would help Alipay to better engage both businesses and consumers in Singapore.
CC Financial Services has acquired more than 600 merchants since it was founded in March this year, and plans to grow the number of merchants to 6,000, which will add to the number of Alipay-compatible businesses in Singapore.
Mr Huang said: “There are plans for CCPay to offer cashless payment services to other shopping malls in Singapore after this launch at People’s Park Complex. Hopefully, we will see more and more traditional merchants go digital which is in line with Singapore’s vision of a Smart Nation.”
Check out the full article at https://www.businesstimes.com.sg/consumer/alipay-targeting-singapore-consumers