The potential biggest IPO shows how Alipay is the popular and major service in China

Even though the potential IPO of Ant Group, which was estimated about $34 billion, on Shanghai and Hong Kong exchanges was suspended, there is no doubt that one of the Chinese Fintech giant’s services, Alipay, is powerful and influential. We can say this because Saudi Aramco became public in 2019 and its IPO price was about $29 billion and this number is (still) the largest in history. In fact, Alipay has more than hundreds million daily active users and the service is more than the mobile payment.

How does Alipay become popular now? One of the key success factors in Alipay is user friendliness of QR code.

How does Alipay work?

Based on its service explanation, Alipay works through QR code in the following way.

The barcode/QR Code payment is an offline instant payment solution offered by Alipay for the in-store checkout.  This payment solution enables merchants to collect money by scanning the barcode/QR code that is shown on a customer’s Alipay wallet app.  The barcode/QR code payment solution is also known as “merchant-scan solution”, which is contrary to another kind of offline solution “customer-scan solution” where customers scan the QR code presented by merchant. One great advantage of using the barcode/QR code payment is that it does NOT require Alipay Wallet App has the internet connection.

The barcode/QR code essentially identifies the owner of Alipay Wallet, with which Alipay knows which customer’s account to be charged for the payment. In addition, the code is auto-refreshed every minute in Alipay Wallet App without requiring the internet connection.

Who is Ant group?

According to its Homepage, the company profile of Ant Group is described like below and the company offers several popular online financial services.

Ant Group aims to create the infrastructure and platform to support the digital transformation of the service industry. We strive to enable all consumers and small businesses to have equal access to financial and other services that are inclusive, green and sustainable.

  • Alipay is China’s largest mobile payments business operated by Ant Group. In 2004, Alipay launched as an escrow service to address the issue of trust between online buyers and sellers in the early days of e-commerce in China. Alipay has grown through continuous innovation to serve approximately 1.3 billion users worldwide together with its global e-wallet partners.
  • Yu’e Bao is an online spare cash management platform launched by Ant Group in the Alipay app. When someone transfers money to Yu’e Bao, it will be put into a money market fund managed by a partner asset management company, generating returns for the user. The platform’s over 600 million users can also access the funds in their Yu’E Bao accounts to make online and offline purchases anytime.
  • Xiang Hu Bao, which means “mutual protection”, is an online mutual aid platform within the Alipay app. It provides a basic health plan to protect participants against 100 kinds of critical illnesses. All participants share the risk of critical illnesses and bear the related expenses collectively, while blockchain technology is used to ensure claims are transparent. While Xiang Hu Bao is not a health insurance product, it complements other premium insurance offerings in the market that have a wider range and depth of coverage.

Those services above are examples that Ant Group offers.

QR code makes our life better and more convenient

Let us imagine if we were to be in 20 years ago and to have to purchase something by only cash. The procedure were to be very troublesome because we had to count our money like 10, 20 and 55 yuan, for example. Also, when we received the change, we counted it to check whether it was correct or not.

Thanks to the new technology, QR code, we do not need to worry about this procedure again. When we show our QR code to a merchant, he or she scans its code and then, our payment will be completed. Also, Alipay does not need the Internet connection, so this feature makes our experience more comfortable and convenient.

When we get accustomed to convenience by the new technology, do we want to back to our previous life without it? The answer should be NO. Therefore, the more people feel convenient and comfortable to use Alipay, the more active users Ant Group acquire and the more value the Chinese Fintech giant is.