PayPal or Alipay: Goliath vs Goliath?

• 19 August 2018 | 1741 Views | By Mint2Save

Fierce competition between America and China has been a hot cake in the world of business and technology. American products and services, such as Google, WhatsApp, which are as good as staple applications for any smartphone, have not survived Chinese business conditions. As known, authorities have a strong grip over internet services and applications there, American geniuses do have a hard time getting the expected potential of results from China. However, the Chinese have not restricted the people from the technology. As a matter of fact, every application, has a Chinese alternative. This includes the merely decade old concept of fintech too.
There was a time when people used to go to banks in order to complete the transactions and waiting in queue for hours to get their turn. Over the years, online transactions had completely changed the scenario of banking. Credit cards and debit cards have become one of the most common ways of payment all over the world. There are various advantages of online payments such as increased speed, convenience and also reduced transaction costs, but one must be aware of some of the disadvantages that online payments have. The most common is a security concern as your account can be hacked, but symmetric encryption helps in protecting your account. There are various other ways of online payment such as net banking, PayPal, Alipay, google wallets and many more.

Though every mode of payment is effective and provides unique features these days PayPal and Alipay are the most common methods of payments. In this article, you will get to know about the basic difference between PayPal and Alipay.

The article discusses the differences between PayPal and Alipay.

The difference in Origin

The most basic difference between these two online modes of payment is that one was developed in America and another in China, but both of them are highly used in order to make payments across the world. You can get various articles or blog quoting that PayPal is best or Alipay is best, but it is difficult to trust anything without having proper evidence, but if you will read this article then surely your doubts will be cleared.

According to the reports in the year 2013, Alipay overtook PayPal in terms of mobile payment. There is not much difference between these payment methods, but still, some of the differences make them unique from each other. Before coming to the differences it’s better to know some of the common features that both methods provide. You need internet to make any kind of transactions on both PayPal and Alipay and also you have to give transaction fees on both of them.

None of them charges any fees for setup and for yearly maintenance. They both allow international transactions. Credit cards and debit cards can be used for the payment in both. They both don’t allow payment through apple pay or android pay. They both provide fraud protection and PCI complaint as their security features. They both provide multiple currency support as well as refund payment features. They both provide telephone support as well as email support, but they don’t provide 24-hour customer support or live chat.

The difference in transaction charges

Coming to the difference, the chief difference between them is that Alipay only takes transaction fees whereas PayPal also charges fees for foreign exchange. Another difference is that you can’t use net banking for payment in it but Alipay allows net banking for payment. PayPal has credit card vault as security features but Alipay doesn’t have such features. PayPal also has two-factor authentication and SSL support but Alipay doesn’t have such features.

The most important part is that PayPal only takes 3-4 days duration for money transfer whereas Alipay can take a week or month for that process. But Alipay provides domestic transactions which PayPal don’t. There are no options for third-party plugin in PayPal while Alipay has a third-party plugin such as Magneto, Joomla, Drupal etc. PayPal is easy to use, requires very less paperwork and one can open account for transactions in short period of time or you can say in an hour by submitting important details but if you want to make transactions through Alipay than you have to wait for 1-2 months in order to get approval even if you have submitted all the necessary documents.

The process of application is transparent in case of PayPal but not in case of Alipay. One can easily manage integration and APIs in PayPal but it is difficult to manage integration in Alipay. PayPal supports webhooks but Alipay doesn’t. PayPal is the best mode of payments in US, UK and in 232 more countries whereas Alipay is most common in China and Aland island only.  

The difference of language in the app

Another simple difference is that PayPal is used widely across the world but not in China because Alipay is the most popular payment method in China. Another reason could be that Chinese people don’t know English properly hence they prefer Alipay over PayPal.

The mobile mode of payment is the major difference which makes Alipay and PayPal different from each other because the mobile mode of payment is not well developed in Pay Pal whereas Alipay has a well-developed mobile mode of payment. Many people think that Alipay is better than PayPal because Alipay supports both buyers and sellers neutrally whereas Pay Pal lean to support the buyer most.

Alipay provides various other functions including loans and touches pay in China due to which its user rate is high in China whereas PayPal is kind of a new payment mode for the people of China hence its user rate is less as compared to Alipay. There is one more difference between Alipay and PayPal that PayPal has a feature of credit-funded transactions whereas Alipay doesn’t have such kind of features. According to the reports, it is the number one site in all over the web whereas Alipay holds the second rank in spite of recent growth.

Conclusion

There is no doubt that Paypal is one of the most revolutionary international cross currency payment system. It is secure, has been widely used by people all over and has consistently improved upon the service, along with obeying of international laws for anti money laundering and payments.

It is also necessary to remember that being a pioneer in a field does not make a company have a monopoly. As per Peter Thiel, “Monopoly is the condition of every successful business”. Interestingly, Paypal did have a monopoly for quite sometime, especially among website freelancers.

As aware to most of us, China is not ready to lag behind in making its in house competitor to every service known, and tries to get the better by including more options and convenience.

Irrespective of their origins, expansion plans, size etc., these two global competitors would be judged on only two things: service and transaction charges. The one with better service and lesser charges would eventually lead ahead.

For a better answer, we have to wait and watch how the Ant’s battle against the Giants.