AliPay, a division of Alibaba.com, has launched a new service offering customers the ability to use the Visa credit card to fund their online purchases.
AliPay customers can fund their payments in three ways: Visa card, wire transfer and online transfer from their existing bank account. Alibaba will also make AliPay available to independent merchants later this spring.
“Our new Visa offering will generate significant growth for AliPay and further establish AliPay as China’s leading online payment standard by providing the most comprehensive, trusted and secure payment solution available, as Visa adoption continues to increase in China,” said Alibaba Chief Financial Officer, Joe Tsai.
The Visa funding option partners AliPay and the Agricultural Bank of China, one of the country’s four largest national banks, which serves as the acquiring bank for Visa payments into AliPay accounts. AliPay has also partnered with the other national financial institutions including China Merchants Bank, the Industrial & Commercial Bank of China and China Construction Bank.
Visa card usage is accelerating rapidly in China, with 6 million Visa cards issued to date. An AC Neilson survey reports credit card penetration in China’s three key cities of Beijing, Shanghai and Guangzhou jumping to 22% in 2004. “In China’s major cities, thirty-five percent of TaoBao’s target customers now possess at least one credit card. Alipay’s Visa offering will significantly expand our market opportunities,” said Tsai.