The new round of payment war, Alipay self fall for third party service providers

 The new round of payment war, Alipay self fall for third party service providers

For Alipay, it is trying to close the relationship with service providers. In October 30th, at the new business new ecosystem conference, Alipay announced its support plan for service providers. According to Alipays statement, it will help the payment providers complete the digital transformation from five aspects: policy, innovation, ability, talent and Big Ali ecology.

Ye Guohui, general manager of Alipay industry payment division, said that Alipay has set KPI for the whole plan, striving to achieve the goal of 100, 000, 000, that is, to create 100 digital service benchmarking samples, help 1000 partners to achieve transformation and upgrading, and train 10000 digital operators.

In order to achieve this goal, Alipay on the one hand to give policy incentives, such as lower rates, more subsidies, and will also open more Ali resources and capabilities, such as IoT and small program capabilities, as well as Ali cloud, nails and other comprehensive access to the Ali operating system.

How the third-party payment giants treat the service providers is related to their market competition strategy. As for the moment, to close the relationship with third-party payment is also to seize market share in the new round of face painting payment war.

In July 12th, market research and consulting firm iResearch AI consulting released the quarterly data release of 2019Q1 Chinas third party payment, showing that in the first quarter of 2019, Alipays market share was 53.8%, which was nearly 14 percentage points higher than that of second fortune paid (39.9%).

Yao Zeyu, an analyst at CICC, pointed out that the current mobile payment has entered the second half, and the flow dividend has peaked. In the future, the competition is about the ecological effect, that is, the added value brought by payment, including credit, financial management, insurance, credit, marketing and other services.

Alipays face changing

All along, WeChat payment and Alipay have different strategies for service providers.

In the process of fast horse race and enclosure in the offline payment scenario, wechat payment takes a big and small way, focuses on the super places of large chain stores, and gives more small and medium-sized merchants to service providers.

According to Geng Zhijun, vice president of wechat payment, as early as 2014, wechat payment team put forward a request that wechat payment cant run its own customers, but focus on making solutions for the underlying industry, so that service providers can expand. Last year, we also planned to choose 30 industries as the benchmark, and introduced smart solutions, which is much broader this year.

While Alipay is expanding its business, its reliance on service providers is less and stronger. A Alipay insider believes that WeChats style of payment is less control over the service providers, more let the service providers first free competition, who will support the development of good; and Alipay tends to make their own industry solutions to expand themselves, and the service providers only serve as the executive role. He also mentioned that Alipay also had some competition in the past, including BD (BusinessDevelopment, business development).

In one case, in 2014, in order to crack down on the illegal behavior of the third-party payment company, UnionPay, together with the peoples Bank of China and the payment and clearing Association, cracked down on the two clean institutions. The so-called Erqing institution is simply the institution that does not obtain the payment business license of the central bank, but actually engages in the payment business with the support of the licensed acquirer.

For regulatory requirements, Alipay is very nervous, immediately strengthened the control of service providers, and WeChat payment is relatively loose, so the relationship with the service providers better. Said the insiders.

With the advent of the digital economy, including the return of the two sides to the brush payment competition in the same race line, Alipay began to pay more attention to the role of service providers.

At present, for Alipay, a strong opportunity lies in the crisis of transformation of service providers.

With the increasing popularity of code scanning payment, the third-party payment giants began to reduce their commissions to service providers. On June 5, wechat payment announced that since July 1, the reward for service providers has dropped from 0.2% to 0.1%, which means that the subsidy for service providers has been halved.

With the decrease of commission, service providers have changed from guerrillas to regular army, and the cost has become higher and higher. As a scanning service provider and a technology company, its necessary to invest hundreds of R & D teams, plus operation and business development, to reach the scale of 1 million transactions per day, which may require more than 30 million yuan of cost expenditure, and the transformation requires huge capital pressure, said one industry head service provider

A more clear transformation route is to provide merchants with more value-added services besides payment, including providing marketing system, member operation, etc.

In the new business and new ecosystem Beijing summit, Ye Guohui announced that Alipay launched a partnership plan to support the transformation from commercial payment to payment business. In the future, Alipay will help service providers transform into digital generation operators and provide more value-added services to make money.

In order to attract service providers, Alipay has come up with more chips - subsidies, commission and resources of Ali department.

With the payment of Alipay and WeChat payment, the new subsidy war is beginning. In September this year, on Alipay open day ShangHai Railway Station, Alipay officially launched two new products for brushing the face, while the high-profile announcement announced that the payment of brush payment from the original 3 billion yuan to the upper limit.

It is understood that for large screen brush self-help equipment, every time a businessman gets a face brush user, Alipay will pay 0.7 yuan reward money, and 6 months continuous return to service. The business can get a reward of 800 yuan in a single month. The maximum reward of a single device can be 4800 yuan. For the desktop brush face cashier equipment, Alipay can continuously return the Commission for 5 months, and the maximum reward for a single device is 2000 yuan. Equipment, for 5 consecutive months, a maximum reward of 1600 yuan can be obtained for a single equipment. The above subsidies will last until March 31, 2020.

In this case, Alipays brush face products seem to have taken the lead. Ye Guohui said, our products are excellent. Our face recognition rate, safety, wind control and supply chain are all very powerful. We have a large number of partners, a large number of shops voting with feet, installing equipment.

In addition to subsidies on the payment of face payments, and in the implementation of the incentive policies in the original payment commission and IoT catering industry, Ye Guohui said Alipay will also encourage cash and flow in the card voucher marketing. He said that some new incentive policies are still in the process of research and formulation.

And these capabilities provided by Alipay are also urgently needed by the service providers. Wang Peng, CEO of Wuhan Li Chu Business Service Co., Ltd. believes that in the past, the service providers only needed the ability and ability of installment to pay for the payments, but now they did complain that the business was hard to do. I need stronger things to serve them.

In addition, in order to support service providers, Ali will also open up Ali Yun and nails, set up Alipay University, and Taobao University, 1 pairs of 1 service assistants through training, to provide service providers with strategic, management and implementation guidance. With a strong team and capability, we can better serve our common merchants and share the huge dividend brought by digitalization. Ye Guohui said.

Taking advantage of the huge volume of IP brought by the European Cup, Alipay said it has brought new business to service businesses and brought new growth points to real business profits.

Choice of service provider

For Alipays draw in, the attitude of the service providers is very positive and realistic. One exhibitor service provider admitted that they are more pushing WeChat dragonflies than WeChat frogs because of the higher subsidy.

Everyone wants to get a subsidy, but it cant be without cost, said a top ranking domestic service provider privately. The price is that the service provider will give the merchants to Alipay, and the merchants and Alipay will sign the contract directly.

He believes that for licensed acquirers and big service providers, although it is a tangled problem to hand over merchants, everyone will eventually participate in it. In fact, service providers have no choice. WeChat and paypal must be merchants, so we can only try our best to satisfy them.

Wang Peng believes that WeChats payment and Alipay have their respective advantages. Some abilities are stronger than WeChat, and some Alipay is stronger. Its not about us. If we want to develop, we must use all the available strength.

In his view, the reason why he chose to cooperate with Alipay is that Alipay is very advanced in the B side, and can plan the one or two stages and provide specific products. For example, when Alipay promotes the brush payment technology, it will plan the roadmap for the service providers, and the service providers will know how to move forward.

Comparatively speaking, Wang Peng thinks that WeChat payment is very open in some aspects, but in some areas it has not given a perfect solution. It needs the service providers to improve themselves, which requires a higher level of technology for the service providers. In contrast, Alipay ToB is more used.

Source: Wall Street editor in charge: Wang Fengzhi, nt2541