New Alipay Initiative Gives Boost to Small Merchants

An employee scans a quick response code displayed on the Alipay app at a shop in Tokyo, Japan. Photo: Bloomberg

Alipay, China's popular mobile payment system operated by Alibaba Group's financial unit Ant Financial, has taken the initiative to help poorly funded micro and small businesses to crack the code in China, where the e-commerce giant is vigorously implementing its new retail strategy driven by emerging digital technologies such as big data analytics and artificial intelligence.

The massive growth plan targeting micro and small merchants ranging from small restaurants and vegetable stalls to sidewalk snack booths and milk tea shops will offer loans and commercial services to create a sound business environment for those businesses, which have long been vexed about the lack of capital and financial guidance.

Alipay said that the growth plan will provide needy micro and small businesses with one trillion yuan of loans over the next three years through Alibaba-backed online lender MYbank. Established in 2015, MYbank, which is one of the first batch of pilot private banks approved by the Chinese government, promises to help micro and small businesses, individual consumers as well as small financial institutions raise funds and solve financial problems by means of Internet technologies.

Thanks to the growth plan, micro and small merchants registered on Alipay will be connected with Alibaba's online wholesale marketplace 1688.com, through which they can complete one-stop procurement and will be given an opportunity to buy products on credit.

Moreover, merchants covered by the growth plan will get compensation if their Alipay quick response codes, which are used to receive payments, are substituted maliciously.

In China, the Alipay-enabled quick response code technology is not only convenient for ordinary consumers to complete payments online, but also for small merchants especially those street vendors to receive payments.

A similar online payment service to Alipay is Tencent's WeChat Pay, which also allows users to purchase goods by scanning quick response codes. In China, the two rivals are competing in a tit-for-tat race to attract consumers and merchants into their respective retail systems.

Therefore, the launch of the growth plan is Alibaba's latest push to expand what it calls the new retail system, which partly plans to put the country's countless small businesses under its unified retail standards by means of Internet technologies and financial innovations.

Statistics from the State Administration for Market Regulation showed that 70 percent of market players were individually owned businesses in 2018.