Merchants are enticed by the lure of the huge e-commerce market in China, enough to give a number of early client wins to Alipay's U.S. merchant acquisition effort.
This week Alipay partnered with online shopping network ShopRunner, giving ShopRunner's clients the option to offer Alipay to consumers in China. That gives a boost to Alipay, which recently launched a service that integrates Alipay with U.S. retailers. Alipay has also rebranded is business as Ant Financial Services as part of a broader diversification effort.
"ShopRunner is just one partnership that will facilitate Alipay acceptance on the U.S. side," said Michael Misasi, a senior analyst at Mercator Advisory Group, noting Alipay has also integrated with several other e-commerce gateways such as Zooz, Stripe and BlueSnap. "Apple has also expressed an interest in partnering. So more of these announcements are expected."
Alipay's service gives U.S. businesses an alternative to PayPal when accepting online payments from China. Alipay has a huge presence in China, processing nearly $1 trillion in payments in 2013.
"China is one of the largest and fasted growing e-commerce markets in the world, so U.S. businesses should be eager to accept a new payment type that allows them to sell into that market more easily," Misasi said.
ShopRunner, which inlcudes thousdands of brands in its network recently added Eddie Bauer, Bergdorf Goodman, Narciso Rodriquez, and The Limited as clients for its U.S.-based service.
The ShopRunner-Alipay partnership will launch with a select group of ShopRunner merchants that have not been announced yet, and is expected to expand quickly in the coming months.
"For our cross-border opportunity in China, Alipay is the partner of choice for ShopRunner and U.S. retailers and brands for several reasons, beginning with the fact that Alipay has built a business based on trust," said Scott Thompson, CEO of ShopRunner, in an email from ShopRunner's public relations department. "Chinese consumers trust Alipay to ensure that the transactions they make online are secure and safe."
Alipay's trust has given it massive scale in China, Thompson said. "For our partnership, this trust and scale is critical to help our retailers reach and deliver their merchandise to Chinese consumers in a new and unique way."
ShopRunner will enable its merchant partners to provide Alipay as a payment option to Chinese consumers, based on detecting a Chinese IP address and providing a customized experience for the Chinese shopper, Thompson said. Alipay will appear alongside of ShopRunner on product detail pages and the cart for items eligible to sell and ship to Chinese consumers.
ShopRunner has also hired Ming Yang, Best Buy China's former chief digital officer and a vice president with Amazon China, to be its country manager in China. ShopRunner has also opened an office in Shanghai.
"U.S. merchants have a significant opportunity to increase revenues with access to offshore consumer, and China is a massive market," said Thad Peterson, a senior analyst at Aite Group. "Since Alipay is the leading online payment offering in China, enabling Alipay in the ShopRunner marketplace makes a lot of sense. Removing friction from the cross-border payment process can only help U.S. online merchants."
Alipay did not return requests for comment by deadline.
"I don't think many people doubt that Alipay can become a commonly accepted payment type among online retailers in the U.S.," Misasi said.
Whether Alipay can win U.S.-based consumers is another matter. Alipay is widely known in China, while the U.S. consumer online payment market has established brands such as PayPal. And PayPal has not been able to enter the Chinese payments market.
"U.S. consumers will likely continue to prefer PayPal," Misasi said. "Retailers might opt to display the Alipay icon only to consumers that have indicated they are located in China."