Alibaba Group to invest US$732 million into Alipay

According to the company, the funds will be used to upgrade its security process, develop products and grow its base of merchant and client users.

“Online payment will continue to play an ever-growing and significant role in the development of e-commerce as well as the stimulation of consumer demand,” said Lucy Peng, CEO of Alipay and CPO of Alibaba Group. “Consumers expect a safe, convenient and affordable globalised payment platform. That’s what we have offered since the creation of Alipay and with this investment we aim to continue playing a fundamental role in the ongoing development of e-commerce in China and around the world.”

As of March 2010, Alipay claimed more than 300 million registered users and provides digital payment services to Alibaba Group’s top domains Alibaba.com and Taobao.com. By the first quarter of 2010, the service further claimed 49.8 per cent of the online payment market share in China.

The news comes a week after Alibaba announced a 36 per cent boost in Alibaba.com’s revenue from the fourth quarter of 2008 to 2009, reaching $162.7 million.

In an effort to cut into Alipay’s hold in China, Ebay’s payment company PayPal announced last month that it would extend its services to China UnionPay clients, allowing users to make overseas purchases.

In 2010, the use of micropayments through e-payment services has been a trend in the media industry. In February, Facebook teamed up with PayPal to offer users a way to purchase on-site products, such as virtual goods, and a month earlier, the Financial Times also linked with PayPal to introduce day passes giving visitors 24-hour access to its website, ft.com.