Alipay is positioning itself as the ideal conduit between US retailers and Chinese shoppers by launching its ePass service.
The move will let U.S. retailers tap into the estimated 500 million Chinese online shoppers who spent $298 billion online in 2013. EPass will be available to any U.S. retailer interested in reaching the Chinese consumer, Jingming Li, president and chief architect of Alipay said in a press briefing.
“We want to demystify the Chinese consumer for U.S. retailers,” he added.
The new service will make shopping on US sites much easier for Chinese customers. While it is possible for a Chinese customer to make purchases on U.S. retail sites without ePass, but the process involves using an international credit card and typically brings mark-ups on Western products. EPass aims to ease the “friction” of international purchases, Li said.
Users of ePass will see an ePass payment option when they check out on a retailer’s site. Chinese shoppers pay in yuan using their Alipay account and Alipay transmits the payment to merchants in 14 currencies via 180 international financial institutions. Customs duties are calculated at checkout.
Alipay says ePass can provide retailers with payment processing services, as well as shipping logistics and marketing services as needed. Alipay will take a cut of each transaction but did not specify how much the percentage is.
Alibaba started Alipay in 2004 to facilitate payments on its web sites and spun off the unit in 2011 into a company controlled by Alibaba CEO Jack Ma. Because it was spun off, Alipay was not part of Alibaba’s mammoth $25 billion IPO in September, the largest ever.
The new service comes as the payments category is heating up rapidly, and cross-border shopping is growing. PayPal, which also offers cross-border payment services, estimates that by 2018, there will be 130 million cross-border shoppers spending over $300 billion globally.
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