Challenges and Opportunities for Market Adaptation of Alipay in the US

Challenges and Opportunities for Market Adaptation of Alipay in the US

Chang Xia, Dennis Anderson
Copyright: © 2022 |Pages: 22
DOI: 10.4018/JBE.309123
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Abstract

China is becoming a cashless society with rapid advancement and adoption in mobile payment in recent years, with Alipay taking the leading role. The total mobile payment transaction value reached US $41.51trillion in 2018, a more than 27-fold increase from 2013, according to the central bank China. Alipay has 900 million domestic annual active users and about 1.2 billion global users by August 2020, with its financial services covering 720 million consumers and 28 million merchants. Alipay, like other Chinese FinTech giants, is expanding into the global market. The US is among one of key global markets. This paper examines opportunities as well as problems and limitations of Alipay in the US market adoption from different perspectives with a detailed introduction of ant financial services as well. This paper also presents a discussion of the COVID-19 impact on Alipay in the end.
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Literature Review

Cortina et al. (2018) stated that the year 2008 marked the emergence of FinTech companies (tech-driven financial companies), which stay parallel with traditional banking services. Three factors contributed to the huge waves of the emergence of FinTech companies: the new regulation reinforced the traditional banking system after the global financial crisis in 2008; greater availability of information technology; popularization of mobile device usage. Cortina et al. (2018) also claimed that FinTech companies provide highly complementary services to established technologies-embracing banks. FinTech companies offer alternative opportunities to consumers and small and medium-sized enterprises (SMEs) in financial services. Blasseg & Koetter (2015) argued that those FinTech services attracted not only households in the developing countries with underdeveloped banking systems, but also underserved borrowers2 in high-income countries. Schindler (2017) showed that FinTech innovations have a greater potential to change financial services, resulting in a greater chance of affecting financial stability. Navaretti et al. (2018) considered FinTech as a crucial healthy evolution of financial markets.

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