Alipay

Could China’s leading payment platform, Alipay, optimise your trading experience? Alipay is a digital wallet and online payment provider. The platform is offered by an increasing number of brokers across Hong Kong and further afield. Whether you trade forex, stocks, commodities or crypto, you can use Alipay to make instant deposits and withdrawals to your account. In this review, we look at the user experience, availability, fees and transaction times.

The best brokers that accept Alipay deposits are Videforex and RoboForex.

What is Alipay?

Alipay is a financial services company developed by Alibaba Group’s founder and owner, Jack Ma. It was first introduced in 2004 and has since gone on to revolutionise digital payments in China. The platform was created as a means to facilitate secure payments between internet buyers and sellers on the popular Chinese e-commerce platform, Taobao. As Taobao grew in popularity, so did Alipay.

Today, the brand is the leading third-party digital payment solution in China. It supports more than 1 billion users across the world, with 520 million daily active users. Alipay owns a majority stake (54%) in the Chinese mobile payment market.

In 2005, the firm moved its headquarters to Shanghai. Ant Financial, its parent company is based in Hangzhou. Ant Financial boasts an estimated valuation of $300 billion. With that said, the stock suffered a plunge in 2020, following the Chinese government pulling its history-making IPO off the market. The company’s filing of $37 billion would have been the biggest in history.

Alipay is widely used across China, Hong Kong and the Asia pacific. To date, its uptake in the western world is not as pervasive, largely thanks to key competitors, PayPal and Venmo. Alipay is available in Traditional Chinese, Simplified Chinese and English. The app supports 27 currencies.

How Alipay Works

Alipay is essentially an eWallet. Users save their credit or debit card details to the app which they can then use to make online and in-store purchases through their mobile phone. The solution operates in a similar way to Apple Pay and can be used with any merchant that lists Alipay as a valid payment method. The same applies to trading, to use the transfer method as a way of funding your account, the broker will need to have Alipay listed as an approved payment method. The application is free to download and use.

As it stands, the payment solution is only available to Chinese nationals. There is, however, a ‘Tour Pass’ available to foreigners travelling in China. The Tour Pass allows you to load up to 2000 RMB on a virtual prepaid card connected to a foreign credit or debit card (Visa and Mastercard permitted). The funds are accessible for 90 days after which they will be refunded. Thanks to a recent update, tourists using the Tour Pass won’t be required to open an account with a local Chinese bank.

Whilst Alipay usage remains restricted, the platform has taken steps to expand its remit. In a major deal with Barclaycard, the solution is now accepted by merchants in the UK and similar deals have been struck in other countries.

Transaction Times

Alipay offers instant executions at most brokers. Traders can access funds quickly and easily when it matters most. But, it is worth noting that withdrawal times may vary between brokers. For more information, contact the relevant customer service team. Generally though, you can expect near-instant deposits and withdrawals within several working days.

Pricing Review

Alipay charges a processing fee as well as a payment method fee (3%). Charges vary according to the payment method used and geographical location:

• Asia Pacific: Processing fee, $0,12 and payment method fee, 3%
• North America: $0,12 and payment method fee, 3%
• Europe: $0,10 and payment method fee, 3%

Brokers may also charge additional fees so read the small print to avoid nasty surprises. Refunds are processed within 2 days.

Note, Alipay customers are limited to a cap of 50,000 CNY per transaction and up to 500,000 CNY per recipient, yearly.

Security

The company requires all users to verify their identity under their Know Your Customer “KYC” policy. You will need your passport and a bank card registered under the same name to set up an account. Verification requests are usually processed within 24 hours.

In a recent statement released by the brand, they confirmed that they implement industry-leading technology, conforming to PCI-DSS information security standards. Security protocols are tailored to protect each transaction. It is not clear, however, quite how much buyer protection the platform affords individual users.

In 2020, the company launched its security platform for global payment partners. The platform was designed to bolster security measures and risk detection capabilities for its service partners. Security remains a prevalent concern in the mobile-payment industry in China. Fraud within the Chinese financial industry outstrips that of all other sectors.

If you’re looking to use contactless payment options, QR code scanning is available and eliminates the chance of virus transmission.

How to Make Alipay Deposits & Withdrawals

To use Alipay to fund your trading account, you will first need to open an official account. This can be done in a few simple steps:

1. Download the Alipay app onto your smartphone
2. Sign up for an account
3. Add your credit or debit card
4. Verify your identity, phone number and bank information
5. Login to your account

Note, not all brokers will support Alipay as a payment method. Brokers based in China or the Asia Pacific are the most likely to, but you will find it is less widely accepted in Europe or the U.S.

Accepted payment methods can usually be found on a broker’s website under Funding methods.

To top up your Alipay account, select the Bank Cards feature. Within Bank Cards, you will have the option to review cards already added as well as add a new card. To link a new card to your account, select ‘add more’ and follow the onscreen prompts. You can then top up your account with your linked card.

Withdrawals can only be made from the funds already held in your account. You cannot borrow funds.

Pros of Alipay for Traders

Alipay has a lot to offer traders, some of the key benefits include:

• 3D secure
• API integration
• Instant execution
• 12+ payout currencies
• Transparent business model
• Mobile optimised payment flow
• Reliable international transfers
• Good coverage across brokers in the Asia pacific
• Does not charge foreign exchange fees like PayPal
• Free to download from the Apple App Store and Google Play Store
• Alipay only credits transactions that have sufficient cash in their account meaning that you cannot run up additional debt

Cons of Alipay for Traders

There are, however, also some limitations to using Alipay to fund your trading account:

• Yearly limits
• Limited choice of brokers
• Bitcoin trading not accepted
• Only available to Chinese nationals
• The app is only available in three languages: Traditional Chinese, Simplified Chinese and English

How Does Alipay Compare vs PayPal & WeChat?

If you are based in Europe or the US, you are probably familiar with PayPal. It provides a similar service to Alipay and is used in much the same way. Both are peer-to-peer payment platforms accessible through your mobile device.

Whilst the two platforms are similar, there are some key differences to consider, notably Alipay is only available to Chinese nationals whilst PayPal accepts clients from all over the world, including China. Pricing structures also vary; PayPal charges a foreign forex exchange fee whereas Alipay only charges a transaction fee.

PayPal also permits credit-funded transactions whilst Alipay does not permit users to withdraw sums greater than their balance. Alipay and PayPal accounts cannot currently be linked.

Another key player in China’s mobile payment market is WeChat Pay. Together with Alipay it dominates 90% of the market share. Launched in 2013, it operates as an additional feature within WeChat, China’s biggest social media and instant messaging app. Whilst foreigners can technically use WeChat to communicate, they cannot use the WeChat payment function. WeChat Pay is not widely supported by brokers and therefore, we would not recommend relying on it as a primary funding method.

Accepted countries

Whilst you must be a Chinese national to create an Alipay account, the platform is supported in virtually every major country including the US, UK, Australia, Hong Kong, Singapore, Canada, Brazil, Russia, Germany, Spain, Italy, Japan, New Zealand, Nepal, Malaysia, Vietnam, Pakistan, Ghana, Nigeria and Kenya.

Verdict

Alipay offers a fast, secure and transparent way to fund your live trading account. The entire ecosystem is easy to navigate and lends itself to the demands of trading. If you are already an Alipay user, it seamlessly integrates your trading portfolio with everyday life.

The key drawback is the geopolitical limitations. Some retail trading remains prohibited in mainland China and whilst the platform has made steps to integrate its technology overseas, the reality is that it is not widely available. You may well find your choice limited when it comes to selecting a broker.

We hope to see the platform continue to push back against restrictions and there are signs that things are already in motion. In recent news, Alipay and Finablr, a partner of the blockchain-based payments platform Ripple (XRP), announced it will work on driving efficiencies through the Alipay blockchain information system.

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