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Stripe Inks Deal With Alipay to Connect Chinese Shoppers With Western Brands

The integration is a first of its kind between Alipay and a U.S. payments company

Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.

Patrick and John Collison have long said the online world shouldn’t be as segregated as the real one. They have taken another step toward closing the gap.

Stripe, the payments company the Collison brothers cofounded, is partnering with China’s popular online payments service Alipay to open up more online buying opportunities in the West for Chinese consumers and give U.S. and European businesses a new way to reach these buyers. The deal lets any business that runs its payments system on Stripe accept purchases made with Alipay on their websites and mobile apps.

Alipay, like PayPal, lets its users make payments online with an email address and passcode, rather than a credit card or debit card. It is said to have about 300 million registered users who connect their bank accounts with the service to fund Alipay purchases.

The integration, which launches in a private beta program today, is the first partnership of its kind between a U.S. payments company and Alipay. Alipay is partially owned by Alibaba Group chairman Jack Ma and is the payment service through which more than three-quarters of all merchandise volume flows on Alibaba e-commerce marketplaces Taobao and Tmall.

“We’ve been very clear with our signaling, talking about how important it is to us that we can enable buyers and sellers anywhere in the world,” Patrick Collison said in an interview. “We’ve talked about how crazy it is that if you go and launch a site or build a mobile app, that you can’t sell frictionlessly to anyone anywhere in the world.”

Stripe is doing its part to narrow that gap. Earlier this year, the company said its customers in the U.S. and Europe could start accepting purchases made in 135 new currencies, in addition to its four original ones. A month later, it also announced that its payments customers could start accepting bitcoin as a payment instrument. By opening up its platform to a variety of different payment instruments, Stripe is making a case to its customers that its top priority is indeed to make cross-border commerce more seamless.

“We’re excited to cooperate with Stripe to help accelerate the introduction of Western brands into China, and to turn global online shopping into a simple and enjoyable experience for Chinese consumers,” Jingming Li, Alipay’s group vice-president and head of Alipay U.S., said in a statement.

Still, the deal is something of a first step in narrowing what is still a large commercial divide between the worlds. It’s not clear, for example, how these Western businesses will market their wares to Chinese shoppers or whether Stripe or Alipay will devote marketing resources toward helping them spread the word. There’s also the issue of language barriers, though English language proficiency has grown in recent years among certain groups in China.

Collison, for his part, admits he isn’t sure what kind of transaction volume increase to expect.

“When you’re building something so categorically new, I think it’s sort of hard to predict,” he said. “We genuinely do not have an idea.”

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