Alipay, a third-party payment operator owned by Alibaba.com, took initiatives to launch a “cyber-credit campaign” on August 2, aiming to offer more secure online payment service to those who want to get up and running quickly.
The newly-hatched plan allows online vendors with a sound credit rating to apply for an electronic logo “Certificated by Alipay”. The logo, by vouching for their credit credibility, gives the companies a competitive edge. So far, two cyber-game websites and several other E-commerce websites have endorsed the plan by applying for the logo.
With the rise in volume of online payments, the battle between payment acceptance companies has become fierce. In China’s online third-party payment service, Alipay has taken a lion’s share, followed by Chinapay and Tenpay. Alipy’s business primarily relies on taobao.com, the main rival to eBay in China, and features a full refund policy.
According to available statistics, payment services transacted a total of 14.326 billion yuan in the first quarter of this year. Online payment operators contributed 97 percent of this total, with 13.931 billion yuan.
“This year the Chinese electronic payment industry will get a sonic boom. We estimate the volume will hit 100 billion yuan and 280 billion yuan mark in 2008 and 2009,” an expert told China Securities.
However, the shakiness of the social credit system in China has put a damper on the development of E-commerce, with the Dongcheng District Bureau of Industry and Commerce in Beijing blacklisting nearly 533 illegal auction websites by July 26.
A recently released survey on their website credit shows that 75 percent of the netizens put premiums on online vendors’ credentials and credit positions rather than on the offering price.
As more online fraudulent deals crop up, Alipay’s “cyber-credit campaign” has popped up at the right moment.
Lu Zhaoxi, CEO of Alipay, told China Securities: “The plan is a non-profit one. We just intend to bring more business players in and expand the market.”
But an analyst voiced a different view, stating that he believed the plan was monopolistic in nature. He cited the “Intel Inside” advertising campaign of the 1990s as an example. This campaign proved very successful and made Intel and its Pentium processor household names. Now Alipay is apparently following suite.
(China.org.cn by He Shan, August 9, 2007)