Payments in the Era of E-Commerce: China's Alipay Case

Abstract

Over the past few years the explosion of e-commerce has been creating massive changes in the conception of payments. Nowadays it is more comfortable for people to purchase goods online, rather than in physical shops. This new tendency led to the creation of ad hoc payment instruments, called e-payments and m-payments, enabling people to buy online in a fast and secure way. Cash has always been the main player in worldwide business transactions, but recently everything has changed. The first two parts of the thesis analyse the main means of payment in Italy and in China, making a sort of comparison. Even if Italian people are increasingly moving toward e- and m-payments, Italy is still known as the “country of cash”: in 2017 86% of money transactions were in cash. M-payments are slowly becoming part of Italian people life, but it will take time to be adopted by everyone. This is not the case of China, which is rapidly moving toward a cashless society: in fact, in the first semester of 2018 66% of Chinese consumers used their mobile phone to make payments. The lack of internal infrastructures and the support of Chinese government fostered the creation of innovative means of payment, such as the well-known Alipay. Consequently, the third and final part of the thesis focuses on Alipay, China’s leading third-party online payment and world’s second largest mobile wallet provider, with 520 million users. This section analyses Alipay from every angle. The case study starts with an introduction on the history and development of Alibaba group, the organization which launched Alipay in 2004. It continues with the description of Alipay payment system, mainly focusing on its functioning, on the main players involved and on its security measures for customers. Furthermore, a comparison between Alipay and its competitors is made and finally the adoption of Alipay outside China, particularly in Italy, is outlined.