Alipay looks to expand connections with KoreaAlipay, the online payment service arm of China’s largest e-commerce company Alibaba, is planning to break into the Korean market to expand its sales internationally.
The No. 1 payment service in China already has nearly 800 million registered users, accounting for 48 percent of China’s online payment market.
When the company enters Korea’s e-commerce market, Korean companies that target Chinese tourists are expected to use Alipay for direct sales to consumers in China as well. Alipay currently partners with about 400 companies in Korea but does not operate in the country.
Alipay hosted a seminar in Seoul on Friday to convince 120 Korean businesses in attendance of the opportunities in China’s huge market.
“Alipay will provide a payment service that conforms to the local regulations in Korea, in cooperation with Korean credit card companies and banks,” president of Alipay International, Sabrina Peng, said at the event.
Alipay pre-deposits customers’ money into accounts for online payments in conjunction with their bank cards. From January 2013 until March, 3.872 trillion yuan ($623.8 billion) worth of transactions have been made using Alipay.
Currently, Alipay can be used to buy 7,000 products at 1,500 foreign businesses in the tour, airline, fashion and cosmetics industry in 40 countries.
“As demand for Korean products among Chinese consumers has increased significantly in the past few years due to the influence of Hallyu, we have cooperated with various Korean companies so that Korea’s high-quality products could reach Chinese consumers,” said Peng.
“We hope to work with different industry players to explore ways to help Korean companies better serve Chinese consumers.”
Korean companies that have partnered with Alipay include Hana Bank, Korea Information and Communication Corporation, Korean Air, Asiana Airlines, Air Busan, Lotte Duty Free and Lotte.com.
While most Korean businesses that export Hallyu goods to China welcome Alipay’s debut in the Korean market, local financial and card companies are on alert.
Alipay has taken customers from China’s existing financial industry and Korean companies worry that the same could happen here.
As of now, Chinese consumers must pay commission fees to both Chinese credit card companies and their partnered Korean card companies when they make payments on Korean websites. But when Alipay is introduced, Korean companies will have to pay commission fees to it, as will Chinese consumers.
“As borders of financial markets are being torn down by Chinese companies, starting with the online payment market, local banks are concerned about their commission fees, which has been one of the major sources of income at this time of low interest rates,” said an official in the banking industry.
BY KIM JUNG-YOON [firstname.lastname@example.org]