Challenges of E-business and E-commerce: Alipay Case Study

This report discusses the challenges created by E-business and E-commerce, focusing on the case study of Alipay. It explores the mechanism used, benefits, and problems associated with Alipay.

Running head: IT INFRASTRUCTURE MANAGEMENT PG
IT Infrastructure Management PG: Part A
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IT INFRASTRUCTURE MANAGEMENT PG
Task A: Case Study: Alipay-Challenges created by E-business and E-commerce
The aim of the report is to discuss the challenges that is created by E-business and E-
commerce. The case study is mainly focused on Alipay, which is a platform for third party
mobile payment and online payment. The mechanism used, the benefits and the problems linked
with Alipay are discussed in the paragraphs below.
1. Detailed Mechanism Used
A product designed by Alibaba Affiliate Company, Alipay is considered to be the most
popular digital wallet of China (Payment and Tax Terms, 2019). The current user count of
Alipay is nearly 400 million people. This application is a digital wallet that is used by individuals
to pay for the goods and services.
Alipay has originated as a payment department of a B2C platform. Alipay could find a
tremendous growth opportunity on Taobao platform. The Alipay put a lot of emphasis on
designing an improved payment authorization rate (Guo & Bouwman, 2016). Alipay operates in
more than 65 financial institution that include Visa and Mastercard. The Alipay is mainly used in
smartphone. Like all other payments application, it provides the facility of QR code payment to
use in payments for local in-store. The application also provides the basic feature of credit card
bill payment, management of the bank account and P2P transfer. There are a number of
similarities and differences between Alipay and other payment platform, which are discussed in
the section below.
2. Difference and Similarities of Alipay with similar online payment systems

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Alipay is a leading payment application with more than 600 million users.
Internationally, it is observed that more than 300 merchants worldwide make use of Alipay to
sell to the customers of China directly. Alipay is a widely used payment method for business as it
helps in reaching a wide number of audiences (Choi & Sun, 2016). The similarities of the Alipay
with other aplictaions are as follows-
Similarities: Similar to the other payment system, Alipay is used for make payment through QR
code.
Similar to a leading payment application, Paypal, it supports foreign exchange
Similar to other online payment application, it enables a user to directly transfer money to an
users’ account (Liu, 2015).
The differences between Alipay and other online payment applications are as follows-
Differences: One of the key difference between Alipay and other similar application is that
Alipay does not charge for exchange fees, while other similar application such as paypal charges
for a transaction fee.
3. Benefits of Alipay
The increase in the customer reach of Alipay is mainly because of the benefits it offers.
The significant benefits offered by Alipay are as follows-
1. Alipay can be used for offline payments as well, which include grocery store, taxi,
subway, restaurants and other. In short, Alipay offers payment in almost all places across the
city.

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IT INFRASTRUCTURE MANAGEMENT PG
2. Alipay offers the feature of burrowing money. The borrowed money can be used in
taobao and offline. Similar to the payments of credit cards, the money can be repaid back offline.
3. Alipay offers the benefit of buying insurance which is one significant benefit of
making use of this payment system.
4. Alipay offers a user to make payment for gold and other financial product which is an
advantage of Alipay.
4. Problems Presented
Alipay allows payment overseas. Oerseas payment is subjected to collection of sales or
income tax. The payments that are made are exclusive of the taxes and the duties that can be
leveraged on the payment. The taxes are not deducted at the time of payment, however, if any
deduction is associated with the fees paid by the customers, the customer while making the
original payment agrees to any subsequent deduction associated with the payment.

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References
Choi, Y., & Sun, L. (2016). Reuse intention of third-party online payments: a focus on the
sustainable factors of Alipay. Sustainability, 8(2), 147.
Guo, J., & Bouwman, H. (2016). An ecosystem view on third party mobile payment providers: a
case study of Alipay wallet. info, 18(5), 56-78.
Liu, R. (2015). The Role of Alipay in China. Nijmegen. Radboud University.
Payment and Tax Terms - Payment and Tax Terms| Alibaba Cloud Documentation Center.
(2019). Retrieved from https://www.alibabacloud.com/help/faq-detail/42426.htm