Using cellphone for online payments
By Ding Yining |
May 19, 2011, Thursday
|
Print Edition
Print Edition
Alipay, the online payment arm of Alibaba Group, China's largest e-commerce company, has teamed up with mobile phone browser UCWeb to go after what it describes as untapped demand in the payment-by-mobile market for online shoppers.
The value of all online shopping in China rose to 1.085 trillion yuan (US$167 billion) last year, with 4.1 billion yuan of sales transacted over mobile phone, according to research house Analysys International. That leaves a lot of buying via desktop PCs and tablet computers to exploit for profit.
"We want to meet every single aspect of what users want from their mobile phone, from browsing to news, from social networking to making payments. Teaming up with Alipay is a perfect choice," said Yu Yongfu, chairman and chief executive officer of UCWeb.
Alipay had nearly 50 percent of the third-party payment market last year. That market is expected to soar in value to 3.65 trillion yuan by 2013. Alipay's nearest competitors are Tencent, which has a 22 percent market share, followed by smaller players such as 99Bill and Chinapay.
Alipay transactions this year are estimated at 730 billion yuan, and payments by mobile phone could surge ten-fold in the next year to reach 10 billion yuan, according to Chief Executive Officer Peng Lei.
Among the country's nearly 2 million online shopping websites, less than 1 percent have the required 10 million yuan of registered capital required by the government to operate online payment businesses.
Under the partnership with UCWeb, Alipay will provide a set of codes for vendors and online shopping websites to display on their sites so that buyers visiting the sites via UCWeb can place orders and make payments on smart phones.
Several years back, mobile payments were usually made by users downloading personalized ring tones and other value-added service from mobile network carriers. The charges were added to their phone bills.
Another mode of payment, using the subscriber identity module in each individual's mobile phone, is also popular. Under that system, a SIM card can be linked with a bank account, allowing users to pay for things like Metro fares and orders at restaurant chains like McDonald's and KFC.
But point-of-sales terminals require a certain amount of initial investment, and online shopping has exceeded the ability of SIM card deductions to handle or even process some of them.
Alipay is banking that it will benefit from the large number of UCWeb visitors, gaining a commission on each order processed on that site. Executives from the two companies declined to elaborate on their revenue-sharing model.
"We hope to grow together and benefit from the booming mobile Internet opportunity as more people and more people seek to pay for goods and services through their mobile phones," said UCWeb's Yu.
China's Internet and mobile phone markets are the largest in the world by numbers. Mobile users alone have reached more than 800 million, with another 100 million added every year. The handset has become an indispensable tool of everyday life for many people.
The ever-growing user base and the popularization of 3G technology, which offers quicker connection speeds, are expected to radically change the way e-commerce companies develop.
Taobao, the largest online shopping platform in China in terms of transactions, has reported that the mobile phone segment of its business is expanding rapidly. Mobile phone users now account for about a sixth of the company's business, said Qiu Changheng, vice director of Taobao's wireless business unit.
In his view, the market value of mobile Internet will be close to that of traditional Internet within three years.
Zhang Xiaowei, chief executive officer of Maimaibao, a website targeted at mobile phone users from rural areas, said he is fully aware of the opportunity the mobile Internet brings to the retail industry.
"For shoppers who use their mobile phones to place orders, easier payment channels can make the shopping process free from restrictions of time and space," Zhang said. "They can search for products whenever and wherever they want and compare prices."
His company's revenue more than doubled in 2010 to 100 million yuan, and yet, he admitted, there is a long way to go in raising user awareness and in making payment channels more convenient and secure.
Bob Neuhaus, head of Global Finance at research house TNS, noted that "in developing markets, the mobile phone may provide an entry point to mobile banking and financial service for millions of people."
The marriage of online payments and mobile devices is a natural fit because mobile devices provide a platform that connects people to the Internet whenever they go, said UCWeb Vice President Chen Shi.
Launched in 2004, UCWeb offers an array of products covering almost all mobile operating systems and has completed four rounds of fund-raising from Nokia Growth Partners, GGV Capital and strategic investor Alibaba Group.
Active users of third-party mobile phone browsers - excluding those that are pre-installed in mobile phones - in China stood at 123 million at the end of last year, and UCWeb had more than 52 percent of that market. Its major competitors include Opera Mini, and Tencent's mobile browser.
"UCWeb's strategy is clearly aimed at introducing more value-added service and expanding its revenue stream apart from mobile advertising and social networking on the mobile end," said independent market analyst Yu Ming.
Xiang Ligang, vice president of the 3G Industry Association, said that it will be almost impossible for one player to dominate the market because the potential is so huge.
"Telecom carriers have rich customer resources, and they also want a share of this market, so competition will be very fierce in the next three to five years," he said.
The value of all online shopping in China rose to 1.085 trillion yuan (US$167 billion) last year, with 4.1 billion yuan of sales transacted over mobile phone, according to research house Analysys International. That leaves a lot of buying via desktop PCs and tablet computers to exploit for profit.
"We want to meet every single aspect of what users want from their mobile phone, from browsing to news, from social networking to making payments. Teaming up with Alipay is a perfect choice," said Yu Yongfu, chairman and chief executive officer of UCWeb.
Alipay had nearly 50 percent of the third-party payment market last year. That market is expected to soar in value to 3.65 trillion yuan by 2013. Alipay's nearest competitors are Tencent, which has a 22 percent market share, followed by smaller players such as 99Bill and Chinapay.
Alipay transactions this year are estimated at 730 billion yuan, and payments by mobile phone could surge ten-fold in the next year to reach 10 billion yuan, according to Chief Executive Officer Peng Lei.
Among the country's nearly 2 million online shopping websites, less than 1 percent have the required 10 million yuan of registered capital required by the government to operate online payment businesses.
Under the partnership with UCWeb, Alipay will provide a set of codes for vendors and online shopping websites to display on their sites so that buyers visiting the sites via UCWeb can place orders and make payments on smart phones.
Several years back, mobile payments were usually made by users downloading personalized ring tones and other value-added service from mobile network carriers. The charges were added to their phone bills.
Another mode of payment, using the subscriber identity module in each individual's mobile phone, is also popular. Under that system, a SIM card can be linked with a bank account, allowing users to pay for things like Metro fares and orders at restaurant chains like McDonald's and KFC.
But point-of-sales terminals require a certain amount of initial investment, and online shopping has exceeded the ability of SIM card deductions to handle or even process some of them.
Alipay is banking that it will benefit from the large number of UCWeb visitors, gaining a commission on each order processed on that site. Executives from the two companies declined to elaborate on their revenue-sharing model.
"We hope to grow together and benefit from the booming mobile Internet opportunity as more people and more people seek to pay for goods and services through their mobile phones," said UCWeb's Yu.
China's Internet and mobile phone markets are the largest in the world by numbers. Mobile users alone have reached more than 800 million, with another 100 million added every year. The handset has become an indispensable tool of everyday life for many people.
The ever-growing user base and the popularization of 3G technology, which offers quicker connection speeds, are expected to radically change the way e-commerce companies develop.
Taobao, the largest online shopping platform in China in terms of transactions, has reported that the mobile phone segment of its business is expanding rapidly. Mobile phone users now account for about a sixth of the company's business, said Qiu Changheng, vice director of Taobao's wireless business unit.
In his view, the market value of mobile Internet will be close to that of traditional Internet within three years.
Zhang Xiaowei, chief executive officer of Maimaibao, a website targeted at mobile phone users from rural areas, said he is fully aware of the opportunity the mobile Internet brings to the retail industry.
"For shoppers who use their mobile phones to place orders, easier payment channels can make the shopping process free from restrictions of time and space," Zhang said. "They can search for products whenever and wherever they want and compare prices."
His company's revenue more than doubled in 2010 to 100 million yuan, and yet, he admitted, there is a long way to go in raising user awareness and in making payment channels more convenient and secure.
Bob Neuhaus, head of Global Finance at research house TNS, noted that "in developing markets, the mobile phone may provide an entry point to mobile banking and financial service for millions of people."
The marriage of online payments and mobile devices is a natural fit because mobile devices provide a platform that connects people to the Internet whenever they go, said UCWeb Vice President Chen Shi.
Launched in 2004, UCWeb offers an array of products covering almost all mobile operating systems and has completed four rounds of fund-raising from Nokia Growth Partners, GGV Capital and strategic investor Alibaba Group.
Active users of third-party mobile phone browsers - excluding those that are pre-installed in mobile phones - in China stood at 123 million at the end of last year, and UCWeb had more than 52 percent of that market. Its major competitors include Opera Mini, and Tencent's mobile browser.
"UCWeb's strategy is clearly aimed at introducing more value-added service and expanding its revenue stream apart from mobile advertising and social networking on the mobile end," said independent market analyst Yu Ming.
Xiang Ligang, vice president of the 3G Industry Association, said that it will be almost impossible for one player to dominate the market because the potential is so huge.
"Telecom carriers have rich customer resources, and they also want a share of this market, so competition will be very fierce in the next three to five years," he said.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
