Chinese B2B e-commerce site Alibaba.com's (1688.HK) AliExpress international wholesale e-commerce platform and Western Union have partnered to develop a new online payment system called Western Union Quick Pay. The system enables buyers in countries with underdeveloped banking and credit-card industries to purchase Chinese-made goods online via AliExpress and pay for them in cash by visiting Western Union outlets.
Cash is wired not to sellers but to AliExpress, which releases the funds only after buyers confirm goods have been received. To receive payment, participating Chinese merchants must have an account with Alibaba's online payment platform Alipay. There is a minimum USD 10 charge on every Quick Pay transaction.
Currently, the U.S. is by far the largest market for AliExpress, which allows Chinese manufacturers to use the Internet to sell directly to small retailers and entrepreneurs around the world, but countries such as Russia and Brazil are increasingly important, said AliExpress Director of Payments & Buyer Satisfaction Liu Qi. In the first half of 2011, the USD amount of AliExpress transactions originating in Brazil grew 676% YoY while Russian transactions were up 1,566%. In contrast, the U.S. grew 477% over the same six months.
AliExpress will continue to offer other electronic payment options including Visa, Mastercard and the Moneybookers online payment system used mainly in Europe.
AliExpress officials said the timing of the launch with Western Union following PayPal's exit from AliExpress in June is a coincidence. The agreement between the two companies was struck last November, months before PayPal and AliExpress decided to part ways. Quick Pay is not meant to replace PayPal because the services are aimed at different markets, Liu said.
Editor's Note: For more information on this topic, please see "PayPal Drops Support for Alibaba's AliExpress," MD 6/03/11 issue.